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 $6 $ 9 $ 3 $4 $ 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 the company uses absorption costing: a. Compute the unit product cost. b. Prepare an income statement for the year. 2. Assume the company uses variable costing: a. Compute the unit product cost. b. Prepare an income statement for the year.

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 $6 $ 9 $ 3 $4 $ 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 the company uses absorption costing: a. Compute the unit product cost. b. Prepare an income statement for the year. 2. Assume the company uses variable costing: a. Compute the unit product cost. b. Prepare an income statement for the year.

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Description: Answer complete question, otherwise skip, answer with detailed working Lynch Company manufactures and sells a single product. The following costs were incurred during the company's first year ofoperations:Variable costs per unit:Manufacturing:Direct

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter5: Process Costing

Section: Chapter Questions

Problem 1PA: The following product Costs are available for Haworth Company on the production of chairs: direct...

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