7 Required Information Problem 19-1A Variable costing income statement and conversion to absorption costing income (two consecutive years) LO P2, P3 Part 1 of 2 The following infomation applies to the questions displayed below] 20 Dowell Company produces a single product. Its income statements under absorption costing for its first two years of operation follow. points 2016 $966,0ee $1,886,0ee 651,08e 315,e8e 2817 Sales ($46 per unit) Cost of goods sold ($31 per unit) Gross margin Selling and administrative expenses 1,271,08e 615,08e 337,250 292,250 22,750$ 277,75e Net income Additlonal Information a. Sales and production data for these first two years follow. 2817 31,eee 41,eee 2816 Units produced Units sold 31,eee 21,eee b. Variable cost per unit and total fixed costs are unchanged during 2016 and 2017. The company's $31 per unit product cost consists of the following. Direct materials 4 Direct labor Variable overhead Fixed overhead ($310,eee/31,eee units) 10 $31 Total product cost per unit Selling and administrative expenses consist of the following. C. 2017 2016 Variable selling and administrative expenses ($2.25 per unit) Fixed selling and administrative expenses 47,250 92,250 245,eee 245,08e Total selling and administrative expenses $292,250 $337,250 7 Problem 19-1A Part 1 1. Complete income statements for the company for each of its first two years under variable costing. (Loss amounts should be entered with a minus sign.) Part 1 of 2 Answer is not complete. 20 points DOWELL Company Variable Costing Income Statements 2017 2016 Sales 966,000 1,886,000 Less: Variable costs Variable selling and administrative 92,250 47,250 expenses Total variable costs 47,250 92,250 Contribution margin 918,750 Less: Fixed expenses Fixed selling and administrative costs Net income (loss) 8. c. Selling and administrative expenses consist of the following. Part 2 of 2 2016 2017 47,250 $ 92, 250 245,000 245,000 $292,250 $337, 250 Variable selling and administrative expenses ($2.25 per unit) Fixed selling and administrative expenses Total selling and administrative expenses 20 points Skipped Problem 19-1A Part 2 eBook 2. What are the differences between the absorption costing income and the variable costing income for these two years? (Loss amounts should be entered with a minus sign.) Print DOWELL COMPANY Reconciliation of Variable Costing Income to Absorption Costing Income 2016 2017 References Variable costing income (loss) Absorption costing income (loss)