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 ($46 per unit) Cost of goods sold ($31 per unit) Gross profit Selling and administrative expenses Income Year 1 $920,000 Year 2 $ 1,840,000 620,000 300,000 170,000 $ 130,000 $ 380,000 1,240,000 600,000 220,000 Additional Information a. Sales and production data for these first two years follow. Units Units produced Units sold Year 1 30,000 20,000 Year 2 30,000 40,000 b. Variable costs per unit and fixed costs per year are unchanged during these years. The company's $31 per unit product cost using absorption costing consists of the following. Direct materials Direct labor Variable overhead) Fixed overhead ($300,000/30,000 units) Total product cost per unit $ 5 9 7 10 $ 31