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 ($64 per unit) Cost of goods sold ($53 per unit) Gross profit Selling and administrative expenses Income Additional Information Year 1 $ 2,368,000 a. Sales and production data for these first two years follow. 1,961,000 Year 2 $ 4,416,000 3,657,000 407,000 308,000 759,000 436,000 $ 99,000 $ 323,000 Units Units produced Units sold Year 1 53,000 37,000 Year 2 53,000 69,000 b. Variable costs per unit and fixed costs per year are unchanged during these years. The company's $53 per unit product cost using absorption costing consists of the following. Direct materials $ 16 Direct labor 23 Variable overhead 3 Fixed overhead ($583,000/53,000 units) 11 Total product cost per unit $ 53 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 $ 148,000 160,000 $ 308,000 Year 2 $ 276,000 160,000 $ 436,000