Dowell Company produces a single product. Its income statements under absorption costing for its first two years of operation follow. Sales ($48 per unit) Cost of goods sold ($33 per unit) Gross margin Selling and administrative expenses Net income 2016 2017 $1,056, 000 $2,016,000 726,000 1,386,000 330,000 630,000 294,500 339,500 $ 35,500 $ 290,500 Additional Information a. Sales and production data for these first two years follow. Units produced Units sold 2016 32,000 22,000 2017 32,000 42,000 b. Variable cost per unit and total fixed costs are unchanged during 2016 and 2017. The company's $33 per unit product cost consists of the following. Direct materials Direct labor Variable overhead Fixed overhead ($320,000/32,000 units) Total product cost per unit $ 6 9 8 10 $33 c. Selling and administrative expenses consist of the following. Variable selling and administrative expenses ($2.25 per unit) Fixed selling and administrative expenses Total selling and administrative expenses 2016 2017 $ 49,500 $ 94,500 245,000 245,000 $294,500 $339,500 1. Complete income statements for the company for each of its first two years under variable costing. (Loss amounts should be entered with a minus sign.) 2017 42,000 DOWELL Company Variable Costing Income Statements 2016 Sales $ 22,000 $ Less: Variable costs Direct materials 192,000 Direct labor 288,000 Variable overhead 256,000 Variable selling and administrative expenses 49,500 192,000 288,000 256,000 49,500 785,500 270,500 785,500 1,185,500 Total variable costs Contribution margin Less: Fixed expenses Fixed overhead Fixed selling and administrative costs 320,000 245,000 320,000 245,000