graded hw ch 7

Exercise 7-6 (Algo) 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 materials Direct labor variable manufacturing overhead variable selling and administrative Fixed costs per year: Fixed manufacturing overhead $ 290,000 Fixed selling and administrative $ 200,000 During the year, the company produced 29,000 units and sold 22.000 units. The selling price of the company's product is $42 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. Complete this question by entering your answers in the tabs below. Req 1A Req 18 Reg 2A Sales Cost of goods sold Gross margin Selling and administrative expense Net operating income Req 20 Prepare an income statement for the year. Assume that the company uses absorption costing. Lynch Company Absorption Costing Income Statement $ 5 $ 14 53 $1 51 924,000 616.000 308.000 222.000 86,000