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 $ 14 $3 $1 Variable manufacturing overhead Variable selling and administrative Fixed costs per year: $1 Fixed manufacturing overhead $ 330,000 Fixed selling and administrative $ 240,000 During the year, the company produced 33,000 units and sold 24,000 units. The selling price of the company's product is $44 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.

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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
$ 14
Direct labor
$3
02:11:27
$1
Variable manufacturing overhead
Variable selling and administrative
Fixed costs per year:
$ 1
Fixed manufacturing overhead
$ 330,000
I
Fixed selling and administrative
$ 240,000
eBook
During the year, the company produced 33,000 units and sold 24,000 units. The selling price of the company's product is $44 per unit.
Required:
Hint
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.
Complete this question by entering your answers in the tabs below.
Req 1A
Req 1B
Req 2A
Req 2B
Prepare an income statement for the year. Assume that the company uses variable costing
Lynch Company
Variable Costing Income Statement
Sales
Variable expenses:
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Transcribed Image Text: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 $ 14 Direct labor $3 02:11:27 $1 Variable manufacturing overhead Variable selling and administrative Fixed costs per year: $ 1 Fixed manufacturing overhead $ 330,000 I Fixed selling and administrative $ 240,000 eBook During the year, the company produced 33,000 units and sold 24,000 units. The selling price of the company's product is $44 per unit. Required: Hint 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. Complete this question by entering your answers in the tabs below. Req 1A Req 1B Req 2A Req 2B Prepare an income statement for the year. Assume that the company uses variable costing Lynch Company Variable Costing Income Statement Sales Variable expenses: www < Prev 6 of 9 MacBook Air 000 30 888 F4 F6 F2 Print References Mc Graw Hill ! 1 8 F1 Q A N @ 2 W S w # 3 X H 1 option command 80 F3 E D $ 4 C R LL F % 5 F5 V T < 6 G Y B & 7 H Aa F7 Next > U N * 00 8 J DII FB - M - 9 K DD F9 O ) O < 1 H L 72 F10 F11 3 P > : ; { + 11 [ = I command option
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