Azule Company produces a single product. Its income statements under absorption costing for its first two years of operation follow PROBLEM SET B Problem 6-1B Variable costing income statement and conversion to absorption costing income (two consecutive years) P2 P3 2016 2017 Sales ($35 per unit) Cost of goods sold ($26 per unit) Gross margin.... Selling and administrative expenses $1.925,000 $2.275,000 1430,000 1.690.000 495,000 585,000 465,00049500 30,000 $ 90,000 . Additional Information a. Sales and production data for these first two years follow: 2016 60,000 55,000 2017 60,000 65,000 Units sold .. b. Its variable cost per unit and total fixed costs are unchanged during 2016 and 2017. Its $26 per unit product cost consists of the following. Direct materials Direct labor... Variable overhead Fixed overhead ($480,000/60,000 units) Total product cost per unit $26 c. Its selling and administrative expenses consist of the following. 2016 2017 Variable selling and administrative expenses ($3 per unit) Fixed selling and administrative expenses Total selling and administrative expenses .. $165,000 $195,000 300,000300,000 $465,000 $495,000 Required check (1) 2016 net loss,1. Prepare this company's income statements under variable costing for each of its first two years. $(10,000) 2. Explain any difference between the absorption costing income and the variable costing income for these two years