Exercise Algo Variable and Absorption Costing Unit Product Costs and Income Statements LO LO
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 $
Fixed selling and administrative $
During the year, the company produced units and sold units. The selling price of the company's product is $ 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 variable costing:
a Compute the unit product cost.
b Prepare an income statement for the year.
