Case 4-29 (Algo) Variable and Absorption Costing Unit Product Costs and Income Statements (L04-1, LO4-2) The following information applies to the questions displayed below) O'Brien Company manufactures and sells one product. The following information pertains to each of the company's first three years of operations: Variable costs per unit: Manufacturing! Direct materials Direct labor Variable manufacturing overhead Variable selling and administrative Fixed costs per year! Pixed manufacturing overhead Pixed selling and administrative expenses $570,000 $200,000 During its first year of operations, O'Brien produced 90,000 units and sold 71,000 units. During its second year of operations, it produced 81,000 units and sold 95,000 units. In its third year, O'Brien produced 83,000 units and sold 78,000 units. The selling price of the company's product is $74 per unit. Case 4-29 (Algo) Part-1 Required information Required: 1. Assume the company uses variable costing and a FIFO inventory flow assumption (FIFO means first in first-out. In other words, assumes that the oldest units in inventory are sold first): a. Compute the unit product cost for Year 1 Year 2, and Year 3. b. Prepare an income statement for Year 1, Year 2, and Year 3. Complete this question by entering your answers in the tabs below. Req IA ReqIB Prepare an income statement for Year 1 Year 2, and Year 3. Year 3 O'Brien Company Variable Costing Income Statement Year 1 Year 2 Sales Variable expenses: Variable cost of goods sold Variable selling and administrative