Dowell Company produces a single product. Its income statements under absorption costing for its first two years of operation follow. Income Statements (Absorption Costing) Sales ($53 per unit) Cost of goods sold ($38 per unit) Gross profit Selling and administrative expenses Income Additional Information Year 1 $ 1,113,000 798,000 Year 2 $ 3,339,000 2,394,000 a. Sales and production data for these first two years follow. 315,000 282,000 945,000 366,000 $ 33,000 $ 579,000 Units Units produced Units sold Year 1 42,000 21,000 Year 2 42,000 63,000 b. Variable costs per unit and fixed costs per year are unchanged during these years. The company's $38 per unit product cost using absorption costing consists of the following. Direct materials $ 12 Direct labor 12 Variable overhead 6 Fixed overhead ($336,000/42,000 units) 8 Total product cost per unit $ 38 c. Selling and administrative expenses consist of the following. Selling and Administrative Expenses Variable selling and administrative ($2 per unit sold) Fixed selling and administrative Total Year 1 $ 42,000 240,000 Year 2 $ 126,000 240,000 $ 366,000 $ 282,000 Total product cost per unit $ 38 c. Selling and administrative expenses consist of the following. Selling and Administrative Expenses Variable selling and administrative ($2 per unit sold) Fixed selling and administrative Total Year 1 $ 42,000 240,000 $ 282,000 Year 2 $ 126,000 240,000 $ 366,000 Required: Prepare income statements for each of these two years under variable costing. (Loss amounts should be entered with a minus sign.) Income (Loss) DOWELL Company Income Statements (Variable Costing) Year 1 Year 2