a. Sales and production data for these first two years follow. Units Units produced Units sold Year 1. 52,000 36,000 Year 2 52,000 68,000 b. Variable costs per unit and fixed costs per year are unchanged during these years. The company's $51 per unit product cost using absorption costing consists of the following. Direct materials Direct labor Variable overhead Fixed overhead ($520,000/52,000 units) Total product cost per unit $ 15 22 4 10 $51 c. Selling and administrative expenses consist of the following Selling and Administrative Expenses Variable selling and administrative (53 per unit sold) Fixed selling and administrative Total Year 1 Year 2 $204,000 5 108,000 190,000 $ 298,000 190,000 5394,000 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 $ 108,000 190,000 $ 298,000 Year 21 $ 204,000 190,000 $ 394,000 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) Sales Less. Variable expenses Variable cost of goods sold Variable selling and administrative expenses Contribution margin Less Fixed expenses Year 1 Year 2 $ 2,268,000 $ 2,268,000 + Company Income Statements (Variable Costing) Year 1 Year 2 $ 2,268,000 $ 2,268,000 Sales Less: Variable expenses Variable cost of goods sold Variable selling and administrative expenses Contribution margin Less: Fixed expenses Fixed selling and administrative expenses Fixed overhead Income (Loss) + tes Trez Company began operations this year. During this year, the company produced 100,000 units and sold 80,000 units. The absorption costing income statement for this year follows. Income Statement (Absorption Costing) Sales (80,000 units x $50 per unit) Cost of goods sold Gross profit Selling and administrative expenses Income Additional Information $ 4,000,000 2,400,000 1,600,000 610,000 $990,000 13 a. Selling and administrative expenses consist of $450,000 in annual fixed expenses and $2 per unit in variable selling and administrative expenses. b. The company's product cost of $30 per unit consists of the following Direct materials Direct labor Variable overhead Fixed overhead ($800,000 100,000 units) Required: $5 per unit $15 per unit $2 per unit $8 per unit Prepare an income statement for the company under variable costing