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 $ $$25$

Direct labor $$10$

Variable manufacturing overhead $$5$

variable selling and administrative $$4$

Fixed costs per year:

Fixed manufacturing overhead $$400,000$

Fixed selling and administrative expenses $$100,000$

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 $$56$ per unit.

Required:

Assume the company uses varlable costing:

a$.$ Compute the unlt 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 varlable costing and absorption costing net operating income in Year $1.$

Complete this question by entering your answers in the tabs below.

Req $1A$

Req $1B$

Req $2A$

Req $2B$

Req $3$

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