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 $$$24$

Direct labor $$12$

Variable manufacturing overhead $$2$

Variable selling and administrative $

Fixed costs per year:

Fixed manufacturing overhead $$320,090$

Fixed selling and administrative expenses $$80,09$

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 $$52$ per unit.

Requlred:

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 $2.$

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