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Make an income statement for the year

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Reference no: EM131810322

Question - 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

$19

Direct labor

$9

Variable manufacturing overhead

$3

Variable selling and administrative

$4

Fixed costs per year:

Fixed manufacturing overhead

$202,400

Fixed selling and administrative

$65,000

During the year, the company produced 18,400 units and sold 15,200 units. The selling price of the company's product is $65 per unit.

Requirement 1: Assume that the company uses absorption costing:

(a) Compute the unit product cost.

(b) Prepare an income statement for the year.

Requirement 2: Assume that the company uses variable costing:

(a) Compute the unit product cost.

(b) Prepare an income statement for the year.

Reference no: EM131810322

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