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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: $6 Direct materials $9 Direct labor Variable manufacturing overhead $3 $4 Variab
During the year, the company produced 25,000 units and 20,000 sold 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 theyear.
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