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 ($ 47 per unit) Cost of goods sold ($33 per unit) Gross profit Selling and administrative expenses Income Year 1 $ 1,175,000 825,000 350,000 285,000 $ 65,000 Year 2 $ 2,209,000 1,551,000 658,000 351,000 $ 307,000 Additional Information a. Sales and production data for these first two years follow. Units Units produced Units sold Year 1 36,000 25,000 Year 2 36,000 47,000 b. Variable costs per unit and fixed costs per year are unchanged during these years. The company's $33 per unit product cost using absorption costing consists of the following. Direct materials Direct labor Variable overhead Fixed ($360,000/3 000 units) Total product cost per unit $ 13 6 4 10 $ 33 c. Selling and administrative expenses consist of the following. Selling and Administrative Expenses Variable selling and administrative ($3 per unit sold) Fixed selling and administrative Total Year 1 $ 75,000 210,000 $ 285,000 Year 2 $ 141,000 210,000 $ 351,000 Required: Prepare income statements for each of these two years under variable costing. (Loss amounts should be entered with a minus sign.) DOWELL Company Income Statements (Variable Costing) Year 1 Year 2 Income (Loss)