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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: 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.
(a) Assume that the company uses absorption costing: i. Compute the unit product cost. ii. Prepare an income statement for the year.

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The unit product cost is $50.

Variable costs per unit,

Manufacturing:                                                  

Direct materials                                                 $ 6  

Direct labor                                                        $ 9    

Variable manufacturing overhead                   $ 3        

Variable selling and administrative                 $ 4    

Fixed costs per year:                                  

Fixed manufacturing overhead                      $ 300.000                  

Fixed selling and administrative                    $ 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.

Full Cost per unit: It is the sum of all the costs related to the production of a product. It comprises Variable Costs, Fixed Costs, Manufacturing costs Mixed Costs, etc. It is calculated by the sum of all the Costs related to the product by the number of units produced. Income statement: All companies in order to calculate net profit or net loss prepare an income statement. The income statement is one of the important financial statements.

Learn more about Income statements here:-https://brainly.com/question/24498019

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