Exercise 7-9 Variable and Absorption Costing Unit Product Costs and Income Statements (L07-1, LO7-2, LO7-3) Walsh Company manufactures and sells one product. The following information pertains to each of the company's first two years of operations: 26 Variable conte per unit: Manufacturing Direct materials Direct labor Variable manufacturing overhead Variable selling and administrative Fixed conto per year Fixed manufacturing overhead Fixed selling and administrative expenses $ 4 3 $320,000 $ 60,000 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 $86 per unit Required: 1. 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 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 3. 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. Req 1A Reg 1B Reg 2A Reg 28 Reg 3 Assume the company uses variable conting, Compute the unit product cont for year 1 and year 2. Year 1 Yoar 2 Unit product cost S 46 5 46 Req 18 > compiere una questivy uncenny your answers in aus veuw. Req 1A Req 1B Req 2A Req 2B Req 3 Assume the company uses variable costing. Prepare an income statement for Year 1 and Year 2. Walsh Company Income Statement Year 2 Year 1 $360,000 Sales Variable expenses: Variable cost of goods sold Variable selling and administrative 360,000 0 Total variable expenses Contribution margin Fixed expenses Fixed manufacturing overhead Fixed selling and administrative expense Total fixed expenses Net operating income (loss) 0 0 $ 360,000 $ 0 Req 1A Reg 1B Req 2A Req 2B Req3 Assume the company uses absorption costing Compute the unit product cost for Year 1 and Year 2. (Round your intermediate calculations and inal answers to 2 decimal places.) Year 1 Year 2 Unit product cost Complete this question by entering your answers in the tabs below. Req 1A Req 1B Reg 2A Req 2B Req3 Assume the company uses absorption costing. Prepare an income statement for Year 1 and Year 2. calculations to 2 decimal places.) Walsh Company Income Statement Year 1 Year 2 Net operating income (loss) 0 $ Complete this question by entering your answers in the tabs below. Reg 1A Req 1B Req 2A Req 28 Reg 3 Reconcile the difference between variable costing and absorption costing net operating income In Year 1. (Enter any losses or deductions as a negative value. Round your intermediate calculations to 2 decimal places.) Year 1 Year 2 Variable costing net operating income (loss) Absorption costing net operating income (loss)