Exercise 7-6 Variable and Absorption Costing Unit Product Costs and Income Statements (L07-1, L07-2] Lynch Company manufactures and sells a single product. The following costs were incurred during the company's first year of operations Variable costa per unit Manufacturing Direct materials Direct labor Variable manufacturing overhead Variable selling and administrative Tixed costs per year Fixed manufacturing overhead Tixed selling and administrative $ $ . $ 10 7 3 3 $310.000 5290.000 During the year, the company produced 38,000 units and sold 18,000 units. The selling price of the company's product is $61 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. Answer is complete but not entirely correct. Complete this question by entering your answers in the tabs below. During the year, the company produced 38,000 units and sold 18,000 units. The selling price of the company's product is $61 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. Answer is complete but not entirely correct. Complete this question by entering your answers in the tabs below. Reg 1A Reg 18 Reg 2A Reg 20 Prepare an income statement for the year. Assume that the company uses absorption costing. Lynch Company Absorption Costing Income Statement Sales 1,098,000 Cost of goods sold 540,000 Gross margin 558,000 Selling and administrative expenso 54,000 3 Net operating income S 504,000