CASE 4-29 Variable and Absorption Costing Unit Product Costs and Income Statements Lo 4-1, GiLo 4-2 O'Brien Company manufactures and sells one product. The following information pertains to each of the company's first three years of | E operations: Variable costs per unit: Manufacturing: Direct materials $32 Direct labor $20 Variable manufacturing overhead $4 Variable selling and administrative $3 Fixed costs per year: Fixed manufacturing overhead $660,000 Fixed selling and administrative expenses $120,000 During its first year of operations, O'Brien produced 100,000 units and sold 80,000 units. During its second year of operations, it produced 75,000 units and sold 90,000 units. In its third year, O'Brien produced 80,000 units and sold 75,000 units. The selling price of the company's product is $75 per unit. Required: 1. Assume the company uses variable costing and a FIFO inventory flow assumption (FIFO means first-in first-out; in other words, it assumes 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. ape eau 2. Assume the company uses variable costing and a LIFO inventory flow assumption (LIFO means last-in first-out; in other words, it assumes the newest **- #4 inventory are sold first): Main content a. Compute the unit product cost for Year 1, Year 2, and Year 3. b. Prepare an income statement for Year |, Year 2, and Year 3. 3. Assume the company uses absorption costing and a FIFO inventory flow assumption (FIFO means first-in first-out; in other words, it assumes 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 |, Year 2, and Year 3. 4. Assume the company uses absorption costing and a LIFO inventory flow assumption (LIFO means last-in first-out; in other words, it assumes the newest 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