Dowell Company produces a single product. Its income statements under absorption costing for its first two years of operation follow Sales (546 per unit) Cost of goods sold (531 per unit) Gross margin Selling and administrative expenses Net income 2018 2019 $966,000 $1,856,000 651,00 1,271,000 315,000 615,000 292, see 342,500 $ 22,500 $ 272,500 Additional Information a. Sales and production data for these first two years follow Units produced Units sold 2018 2019 31,000 31,000 21,000 41,000 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 55 Direct materials Direct Iwbor Variable overhead Fixed overhead (5310,000/31,600 units) Total product cost per unit 2 $31 c. Selling and administrative expenses consist of the following Variable selling and administrative expenses (52.5 per unit) Fixed selling and administrative expenses Total selling and sinistrative expenses 2018 2019 $ 52,500 $102,500 240.ee 240.be 5292,500 $342.500 Total product cost per unit $31 c. Selling and administrative expenses consist of the following Variable selling and administrative expenses (52.5 per unit) Fixed selling and administrative expenses Total selling and administrative expenses 2018 2019 $ 52,500 $102,500 240.000 200.000 5297,500 $2,500 1. Prepare income statements for the company for each of its first two years under variable costing loss amounts should be entered with a minus sign DOWELL Company Varlatile Costing Income Statements 2010 2019 Net incomes) Dowell Company produces a single product. Its income statements under absorption costing for its first two years of operation follow Sales (546 per unit) Cost of goods sold ($31 per unit) Gross margin Selling and administrative expenses Net income 2018 2019 $966,000 $1,886,000 651,600 1,271,000 315,600 615,000 292,500 342,500 $ 22,500 $ 272,500 Additional Information a. Sales and production data for these first two years follow Units produced Units sold 2018 2019 31,000 31.000 21.600 41,000 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 55 Direct materials Direct labor Variable overhead Fixed overhead (5310,000/31,000 units) Total product cost per unit 2 10 $31 c. Selling and administrative expenses consist of the following Variable selling and administrative expenses (12.5 per unit) Fixed selling and administrative expenses Total selling and administrative expenses 2018 2017 $ 52,500 5102,500 240.000 240.000 5292.505342,500 Units produced Units sold 2018 31,000 31,000 21.000 41.000 b. Variable cost per unit and total foxed costs are unchanged during 2018 and 2019. The company's $31 per unit product cost consists of the following 55 Direct materials Direct labor Variable overhead led overhead (5310,00/31,000 units) Total product cost per unit to $31 e. Selling and administrative expenses consist of the following Variable selling and dinistrative speses (52.5t Wired selling and traie Total selling dadelinistrative expenses $ 52,00 1.500 240,00 3292,500 543,500 2. Prepare a table as in Exhibit 612 to convert Variable costing income to absorption costing income for both 2018 and 2012 Loss amounts should be entered with a minus sign) DOWELL COMPANY Reconciliation of Variable Costing Income to Absorption Coving income Variable costing income (los) 2013 Absorption costing income (s)
