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 ($60 per unit) Cost of goods sold ($45 per unit) Year 2 Year 1 $ 1,920,000 $ 3,960,000 2,970,000 1,440,000 480,000 338,000 990,000 474,000 Gross profit Selling and administrative expenses Income Additional Information a. Sales and production data for these first two years follow. Units Units produced Units sold Year 1 49,000 32,000 Year 2 49,000 66,000 $ 142,000 $ 516,000 b. Variable costs per unit and fixed costs per year are unchanged during these years. The company's $45 per unit product cost using absorption costing consists of the following. Direct materials Direct labor Variable overhead Fixed overhead ($539,000/49,000 units) Total product cost per unit $ 12 19 3 11 $ 45 c. Selling and administrative expenses consist of the following. Selling and Administrative Expenses Variable selling and administrative ($4 per unit sold) Fixed selling and administrative Total Year 1 $ 128,000 210,000 Year 2 $ 264,000 210,000 $ 338,000 $ 474,000 Required: Prepare income statements for each of these two years under variable costing. (Loss amounts should be entered with a minus sign.) Sales Less: Variable expenses Income (Loss) DOWELL Company Income Statements (Variable Costing) Year 1 Year 2