Walsh Company manufactures and sells one product. The following Information pertains to each of the company's first two years of operations: Variable costo per uniti Manufacturing Direct materials $ 23 Direct labor 5.13 Variable manufacturing overhead $4 Variable selling and administrative 53 Tixed costs per year Pixed manufacturing overhead $ 320,000 Fixed selling and administrative expenses $ 90,000 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 $55 per unit. Required: 1. 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 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 3. Reconcile the difference between variable costing and absorption costing net operating Income In Year 1 Answer is not complete Walsh Company Income Statement Year 2 Year 1 2,200,000 $ $ 2,750,000 Sales Variable expenses: Variable cost of goods sold Variable selling and administrative Variable cost of goods sold 1,600,000 120,000 1,720,000 480,000 3,920,000 (1,720,000) 2,000,000 150,000 2,150,000 600,000 4,900,000 (2,150,000) Total fixed expenses Contribution margin Fixed manufacturing overhead Fixed selling and administrative expense 480,000 320,000 90,000 410,000 1,300,000 $ (3,020,000) 600,000 320,000 90,000 410,000 1,420,000 $ (3,570,000) Net operating income (loss) Req 1A Reg 1B Req ZA Req 2B FARKLI Req3 WE Reconcile the difference between variable costing and absorption costing net operating income in Year 1. (Enter any lo deductions as a negative value.) Variable costing net operating income (loss) Add (deduct) fixed manufacturing overhead deferred in (released from) inventory Absorption costing net operating Income (loss) Year 1 Year 2 $ 70,000 $ 190,000 64,000 64,000 $ 134,000 $ 126,000