what is the cost of goods sold and gross margin

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. Complete this question by entering your answers in the tabs below. Reg 1A Req 1B Reg 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 $ 2,400,000 $ 3,000,000 Cost of goods sold 2,000,000 Gross margin 400,000 Selling and administrative expenses 160,000 180,000 Net operating income (loss) $ 240,000 $ (179,949) Walsh Company manufactures and sells one product. The following information pertains to each of the company's first two yea operations: Variable costs per unit: Manufacturing: Direct materials Direct labor Variable manufacturing overhead Variable selling and administrative Fixed costs per year: Fixed manufacturing overhead Pixed selling and administrative expenses $ $ $ S 25 15 5 2 $ 250,000 $ 80,000 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 $60 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, Complete this question by entering your answers in the tabs below. Reg 1A Req 1B Reg 2A Reg 28 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:) Assume the company uses absorption costing. Compute the unit product cost for Year 1 and Year 2. decimal places.) Year 1 Year 2 Unit product cost $ 50.00 $ 51.25