Dowell Company produces a single product. Its income statements under absorption costing for its first two years of operation follow.

Income Statements (Absorption Costing)	Year 1	Year 2
Sales ($57 per unit)	$ 1,824,000	$ 3,420,000
Cost of goods sold ($46 per unit)	1,472,000	2,760,000
Gross profit	352,000	660,000
Selling and administrative expenses	244,000	300,000
Income	$ 108,000	$ 360,000

Additional Information

Sales and production data for these first two years follow.

Units	Year 1	Year 2
Units produced	46,000	46,000
Units sold	32,000	60,000

Variable costs per unit and fixed costs per year are unchanged during these years. The company's $46 per unit product cost using absorption costing consists of the following.

Direct materials	$ 16
Direct labor	16
Variable overhead	6
Fixed overhead ($368,000/46,000 units)	8
Total product cost per unit	$ 46

Selling and administrative expenses consist of the following.

Selling and Administrative Expenses	Year 1	Year 2
Variable selling and administrative ($2 per unit sold)	$ 64,000	$ 120,000
Fixed selling and administrative	180,000	180,000
Total	$ 244,000	$ 300,000