Dowell Company produces a single product. Its income statements under absorption costing for its first two years of operation follow.

Income Statements $($Absorption Costing$)$ Year $1$ Year $2$

Sales $($$$63$ per unit$)$ $ $2,268,000$ $ $4,284,000$

Cost of goods sold $($$$51$ per unit$)1,836,0003,468,000$

Gross profit $432,000816,000$

Selling and administrative expenses $298,000394,000$

Income $ $134,000$ $ $422,000$

Additional Information

Sales and production data for these first two years follow.

Units Year $1$ Year $2$

Units produced $52,00052,000$

Units sold $36,00068,000$

Variable costs per unit and fixed costs per year are unchanged during these years. The company's $$51$ per unit product cost using absorption costing consists of the following.

Direct materials $ $15$

Direct labor $22$

Variable overhead $4$

Fixed overhead $($$$520,000/52,000$ units$)10$

Total product cost per unit $ $51$

Selling and administrative expenses consist of the following.

Selling and Administrative Expenses Year $1$ Year $2$

Variable selling and administrative $($$$3$ per unit sold$)$ $ $108,000$ $ $204,000$

Fixed selling and administrative $190,000190,000$

Total $ $298,000$ $ $394,000$

Required:

Prepare income statements for each of these two years under variable costing