Dowell Company produces a single product. Its income statements under absorption costing for its first two years of operation follow. 2016 2017 Sales ($46 per unit) Cost of goods sold ($31 per unit) Gross margin Selling and administrative expenses Net income $1,012,000 $1,932,000 682,000 1,302,000 330,000 630,000 324,000 $46,000 $ 306,000 284,000