Dowell Company produces a single product. Its income statements under absorption costing for its first two years of operation follow. Income Statements (Absorption Costing) Cost of goods sold ($37 per unit) Sales ($49 per unit) Year 1 Year 2 $ 1,323,000 999,000 $ 2,401,000 1,813,000 324,000 264,000 588,000 308,000 $ 60,000 $ 280,000 Gross profit Selling and administrative expenses Income Additional Information a. Sales and production data for these first two years follow. Units Year 1 Year 2 Units produced Units sold 38,000 27,000 38,000 49,000 b. Variable costs per unit and fixed costs per year are unchanged during these years. The company's $37 per unit product cost using absorption costing consists of the following. Direct materials Direct labor Variable overhead Fixed overhead ($384,000/38,000 units) Total product cost per unit $15 8 8 $ 37 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 Year 2 $ 54,000 210,000 $264,000 $ 98,000 210,000 $ 308,000 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