Exercise 7-6 Variable and Absorption Costing Unit Product Costs and Income Statements [LO7-1, LO7-2] Lynch Company manufactures and sells a single product. The following costs were incurred during the company's first year of operations Variable costs per unit: Manufacturing Direct materiale Direct labor Variable manufacturing overhead Variable selling and administrative Pixed costs per year Pixed nanufacturing overhead Fixed se11ing and administrative 10 $380,000 290,000 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 es Required: 1. Assume that the company 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. uses absorption costing