operations:

$2$

points

Variable costs per unit:

Manufacturing:

Direct materials $ $25$

Direct labor $ $15$

Variable manufacturing overhead $$5$

Variable selling and administrative $$2$

Fixed costs per year:

Fixed manufacturing overhead

$ $250,000$

Fixed selling and administrative expenses $,$$$80,000$

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 $$60$ per unit.

Required:

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 $2.$

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 $2.$

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.

Required $1$ A

Required $1$B

Required $2$A

Required $2$B

Required $3$

Reconcile the difference between variable costing and absorption costing net operating income in Year $1.$

Note: Enter any losses or deductions as a negative value.

$\backslash$table$[[,$Year $1,$Year $2],[$Variable costing net operating income $($loss$),$$$,370,000,$$$,320,000],[$Add $($deduct$)$ fixed manufacturing overhead deferred in $($released from$)$ inventory under absorption costing,,$50,000,,50,000],[$Absorption costing net operating income,$$,800,000,$$$,370,000]]$ Do question $3$ in detail