Exercise $6-6($Static$)$ Variable and Absorption Costing Unit Product Costs and Income Statements $[$LO$61,$ LO$6-2]$

Lynch Company manufactures and sells a single product The following costs were incurred during the company's first year of operations:During the year, the comparty produced $25,000$ units and sold $20,000$ units. The selling price of the company's praduct is $$50$ per unit.

Required:

Assume the company uses absorption costing:

a$.$ Compute the unit product cost.

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

Assume the company uses variable costing:

a$.$ Compute the unit product cost.

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

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