Selection on the Left column: Advertising, Beginning merchandise inventory, commissions, depreciation, ending merchandise inventory, fixed manufacturing overhead, fixed selling and administrative expense, indirect labor, indirect materials, purchases, sales, variable cost of goods sold, variable selling expense.

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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 $6 $9 $3 $4 Direct labor Variable manufacturing overhead Variable selling and administrative Fixed costs per year: Fixed manufacturing overhead Fixed selling and administrative $ 300,000 190,000 During the year, the company produced 25,000 units and sold 20,000 units. The selling price of the company's product is $50 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 Prepare an income statement for the year. Assume that the company uses variable costing Lynch Company Variable Costing Income Statement $ 1,000,000 Sales Variable expenses: $450,000 Fixed manufacturing overhead Fixed manufacturing overhead Fixed manufacturing overhead 90,000 90,000 630,000 370,000 $ 370,000 Net operating income