Direct materials

Direct labor

Variable manufacturing overhead $,$$$14$

Variable selling and administrative $,$$$4$

Fixed costs per year:

Fixed manufacturing overhead

Fixed selling and administrative expenses

$$240,000$

$$90,000$

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 $$55$ per unit.

Required:

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 $2.$

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 $2.$

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.

Required $1$ A

Required $1$B

Required $2$A

Required $2$B

Required $3$

Assume the company uses absorption costing. Prepare an income statement for Year $1$ and Year $2.$

Note: Round your intermediate calculations to $2$ decimal places.

$\backslash$table$[[$Walsh Company,,$],[$Income Statement,,$],[$Sales$,$Year $1,$Year $2],[$Cost of goods sold,$$,2,200,000,$$