company produces a single product. Its income statements under absorption costing for its first two years of operation follow Sales ($46 per unit) Cost of goods sold ($31 per unit) Gross margin Selling and administrative expenses Net income 2018 2019 $1,058,000 $1,978, eee 713, eee 1,333, eee 345,000 645,800 296,750 341, 750 $ 48,250 $ 303,250 Additional Information a. Sales and production data for these first two years follow. Units produced Units sold 2018 2019 33,00 33,000 23,eee 43,000 b. 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 b. 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 ($330,000/33,000 units) Total product cost per unit $ 4 9 8 10 $31 C. Selling and administrative expenses consist of the following Variable selling and administrative expenses ($2.25 per unit) Fixed selling and administrative expenses Total selling and administrative expenses 2018 2019 $ 51,750 $ 96,750 245, eee 245, ese $296,750 $341,750 2. Prepare a table as in Exhibit 6.12 to convert variable costing income to absorption costing income for both 2018 and 2019. (Los amounts should be entered with a minus sign.) DOWELL COMPANY Reconciliation of Variable Costing Income to Absorption Costing Income 2018 Variable costing income (loss) (51.750) $ Add: Fixed overhead in ending inventory 100,000 Less: Fixed overhead in beginning inventory Absorption costing income (loss) 2019 403,250