13 Dowell Company produces a single product. Its income statements under absorption costing for its first two years of operation follow. 3 points Income Statements (Absorption Costing) Sales ($51 per unit) Cost of goods sold ($41 per unit) Gross profit Selling and administrative expenses Income Year 1 $ 1,428,000 1,148,000 280,000 234,000 $ 46,000 Year 2 $ 2,652,000 2,132,000 520,000 306,000 $ 214,000 eBook Additional Information a. Sales and production data for these first two years follow. Print Units Units produced Units sold Year 1 40,000 28,000 Year 2 40,000 52,000 References b. Variable costs per unit and fixed costs per year are unchanged during these years. The company's $41 per unit product cost using absorption costing consists of the following. Direct materials Direct labor Variable overhead Fixed overhead ($400,000/40,000 units) Total product cost per unit $ 17 10 4 10 $ 41 c. Selling and administrative expenses consist of the following. Selling and Administrative Expenses Variable selling and administrative ($3 per unit sold) Fixed selling and administrative Total Year 1 $ 84,000 150,000 $ 234,000 Year 2 $ 156,000 150,000 $ 306,000 Required: Prepare income statements for each of these two years under variable costing. (Loss amounts should be entered with a minus sign.) DOWELL Company Income Statements (Variable Costing) Year 1 Year 2 Sales $ 1,428,000 $ 2,652,000 Less: Variable expenses Variable selling and administrative expenses Variable cost of goods sold Contribution margin Less: Fixed expenses Fixed selling and administrative expenses Fixed overhead Income (Loss)