Walsh Company manufactures and sells one product. The following information pertains to each of the company's first two years of Req $1A$

Req $1B$

Req $2$B

Assume the company uses variable costing. Prepare an income statement for Year $1$ and Year $2.$

$\backslash$table$[[$Walsh Company$],[$Income Statement$],[,$Year $1,$Year $2],[$Sales$],[$Variable expenses:$],[$Variable cost of goods sold$],[$Variable selling and administrative$],[,,],[,,],[,0,0],[,0,0],[,,],[,,],[,,],[,,],[,,],[$Total fixed expenses,$0,0],[$Net operating income $($loss$),$$$,$$$]]$

operations:Manufacturing: Direct labor $ $ $12$Variable selling and administrative $ $1$

Fixed costs per year:Fixed selling and administrative expenses $ $60,000$During its first year of operations, Walsh produced $50,000$ units and sold $40,000$ units. During its second year of operations, it

produced $40,000$ units and sold $50,000$ units. The selling price of the company's product is $$57$ per unit.

Required:

Assume the company uses variable costing:

a$.$ Compute the unit product cost for Year $1$ and Year $2.$

b$.$ Prepare an income statement for Year $1$ and Year $2.$

Assume the company uses absorption costing:

a$.$ Compute the unit product cost for Year $1$ and Year $2.$

b$.$ Prepare an income statement for Year $1$ and Year $2.$

Reconcile the difference between variable costing and absorption costing net operating income in Year $1.$

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