2 Exercise 7-6 (Algo) Variable and Absorption Costing Unit Product Costs and Income Statements [LO7-1, L07-2) 4.15 ports ey 9 02:13:10 ever de Lynch Company manufactures and sells a single product. The following costs were incurred during the company's first year of operations: Variable conta per unit Manting Direct materials Diretor Variable manufacturing over bead Variable selling and adminiatrative Tiedo per year Tied manufacturing overhead $ 160,000 Txoling and administrative $ 270,000 During the year, the company produced 36,000 units and sold 18,000 units. The selling price of the company's product is $55 per unit $12 $5 1 1 Required: 1. Assume that the company uses absorption costing a. Compute the unit product cost. b. Prepare an income statement for the year 2. Assume that the company uses variable costing a. Compute the unit product cost. b. Prepare an income statement for the Answer is not complete. 4.16 Complete this question by entering your answers in the tabs below. points 02:13:45 Reg 1A Res 18 Req 2A Reg 20 Prepare an Income statement for the year. Assume that the company uses absorption costing. Lynch Company Absorption Costing Income Statement Sales $ 990,000 Cost of goods sold (504,000) Gross margin 486.000 Fixed manufacturing overhead (288,000) Net operating income $ 190,000 Reg 1A Req2A > 2 Prepare an income statement for the year. Assume that the company uses variable costing. Lynch Company Variable Costing Income Statement 4.16 polets $ 990,000 Sales Variable expenses Variable cost of goods sold OOO 02:13:38 $ 648.000 648,000 342,000 Variable cost of goods sold Gross margin Fixed expenses: Fixed manufacturing overhead Fixed selling and administrative 360,000 270,000 630,000 Net operating incomo $ (288,000)