06-1A Variable costing income statement and conversion to absorption costing income (two consecutive years) LO P2, P3 Dowell Company produces a single product. Its income statements under absorption costing for its first two years of operation follow. 2018 2019 Sales ($44 per unit) $924,000 $1,804,000 Cost of goods sold ($29 per 609,000 1,189,000 unit) Gross margin 315,000 615,000 Selling and administrative 282,000 322,000 expenses Net income $ 33,000 $293,000 Additional Information 1. Sales and production data for these first two years follow. 2018 2019 Units produced 31,000 31,000 Units sold 21,000 41,000 1. Variable cost per unit and total fixed costs are unchanged during 2018 and 2019. The company's $29 per unit product cost consists of the following. Direct materials Direct labor Variable overhead $5 9 5 Fixed overhead ($310,000/31,000 units) 10 Total product cost per unit $29 1. Selling and administrative expenses consist of the following. Variable selling and administrative expense Fixed selling and administrative expenses Total selling and administrative expenses 1. Prepare income statements for the company for each of its first two years under variable costing. 2. Prepare a table as in Exhibit 6.12 to convert variable costing income to absorption costing income for both 2018 and 2019. Dowell Company produces a single product. Its income statements under absorption costing for its first PROE wo years of operation follow. Sales (546 per unit). Proble Cost of goods sold ($31 per unit) Gross margin. Selling and administrative expenses Net income. Additional Information A Sales and production data for these first two years follow, Units produced. Units sold. 2018 2019 Variabl $920,000 $1.840,000 statem to abs 620.000 1,240.000 incom 300,000 600,000 years 290.000 340,000 P2 $10,000 $260,000 2018 2019 30,000 30,000 20,000 40.000 Variable cost per unit and total fixed costs are unchanged during 2018 and 2019. The company's $31 per unit product cost consists of the following. Direct materials. Direct labor. Variable overhead Fixed overhead ($300,000/30,000 units). $5 9 7 $31 10 Total product cost per unit. c. Selling and administrative expenses consist of the following. Required 2018 2019 Variable selling and administrative expenses ($2.50 per unit) $ 50,000 $100,000 240,000 240,000 $290,000 $340,000 Fixed selling and administrative expenses. Total selling and administrative expenses... 1. Prepare income statements for the company for each of its first two years under variable costing. 2. Prepare a table as in Exhibit 6.12 to convert variable costing income to absorption costing income fe both 2018 and 2019