Walsh Company manufactures and sells one product. The following information pertains to each of the company's first two years of operations: Variable costs per unit: Manufacturing: Direct materials Direct labor Variable manufacturing overhead Variable selling and administrative Fixed costs per year: Fixed manufacturing overhead Fixed selling and administrative expenses $ 29 $ 11 $ 6 $ 5 $ 240,000 $ 70,000 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 $59 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. X Answer is not complete. Complete this question by entering your answers in the tabs below. Req 1A Reg 1B Req 2A Req 2B Req3 Assume the company uses variable costing. Prepare an income statement for Year 1 and Year 2. Walsh Company Income Statement Year 1 2.360,000 $ Year 2 2,950,000 > $ Sales Variable expenses Variable selling and administrative oo 200,000 250,000 200,000 Total variable expenses Contribution margin 250,000 2,700,000 2,160,000 Fixed expenses: Fixed manufacturing overhead Fixed selling and administrative expense 240,000 70,000 240,000 70,000 310,000 310,000 Net operating income (loss) $ 1,850,000 $ 2,390,000 X Answer is not complete. Complete this question by entering your answers in the tabs below. Req 1A Reg 1B Req 2A Req 2B Reg 3 Assume the company uses absorption costing. Prepare an income statement for Year 1 and Year 2. (Round your intermediate calculations to 2 decimal places.) Walsh Company Income Statement Year 1 Year 2 Sales $ 2,360,000 $ 2,950,000 Cost of goods sold 2,032,000 2,588,000 362,000 Gross margin 328,000 42,000 Selling and administrative expenses Net operating income (loss) 10,000 318,000 $ $ 320,000