Chapter $4$ Homework Exercises $($GRADED$)$

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Lynch Company manufactures and sells a single product. The following costs were incurred during the company's first year of operations:

$10$ points References References

Variable costs per unit:

Manufacturing:

Direct materials $ $12$

Direct labor $$7$

Variable manufacturing overhead

Variable selling and administrative

Fixed costs per year:

Fixed manufacturing overhead $$248,000$

Fixed selling and administrative $$158,000$

During the year, the company produced $31,000$ units and sold $21,000$ units. The selling price of the company's product is $$44$ per unit.

Required:

Assume that the company uses absorption costing:

a$.$ Compute the unit product cost.

b$.$ Prepare an income statement for the year.

Assume that the company uses variable costing:

a$.$ Compute the unit product cost.

b$.$ Prepare an income statement for the year.

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

Req $1A$

Req $1$B

Req $2A$

Req $2$B

Compute the unit product cost. Assume that the company uses absorption costing.

Unit product cost

Req $1$B

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