Exercise 6-6 Variable and Absorption Costing Unit Product Costs and Income Statements [LO6-1, LO6-2] Lynch Company manufactures and sells a single product. The following costs were incurred during the companys first year of operations: Variable costs per unit: Manufacturing: Direct materials $ 6 Direct labor $ 9 Variable manufacturing overhead $ 3 Variable selling and administrative $ 4 Fixed costs per year: Fixed manufacturing overhead $ 300,000 Fixed selling and administrative $ 190,000 During the year, the company produced 25,000 units and sold 20,000 units. The selling price of the companys product is $50 per unit. Required: 1. Assume that the company uses absorption costing: a. Compute the unit product cost. b. Prepare an income statement for the year. 2. Assume that the company uses variable costing: a. Compute the unit product cost. b. Prepare an income statement for the year.