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Exercise 6-6(Algo) Variable and Absorption Costing Unit Product Costs and Income Statements [LO6-1, [06-2]...

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Accounting

Exercise 6-6(Algo) Variable and Absorption Costing Unit Product Costs and Income Statements [LO6-1,
[06-2]
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 $10
Direct labor $4
Variable manufacturing overhead $2
Variable selling and administrative $2
Fixed costs per year:
Fixed manufacturing overhead $374,000
Fixed selling and administrative $284,0
During the year, the company produced 34,000 units and sold 26,000 unlts. The selling price of the company's product is $44 per unit.
Required:
Assume that the company uses absorption costing:
a. Compute the unit product cost.
b. Prepare an Income statement for the year.
Assume that the company uses varlable costing:
a. Compute the unit product cost.
b. Prepare an Income statement for the year. ANSWER ALL PARTS THANK YOU
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