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 ($45 per unit)

$ 990,000

$ 2,070,000

Cost of goods sold ($29 per unit)

638,000

1,334,000

Gross profit

352,000

736,000

Selling and administrative expenses

289,000

337,000

Income

$ 63,000

$ 399,000

Additional Information

a Sales and production data for these first two years follow.

Units

Year 1

Year 2

Units produced

34,000

34,000

Units sold

22,000

46,000

b Variable costs per unit and fixed costs per year are unchanged during these years. The company's $29 per unit product cost using absorption costing consists of the following.

Direct materials

$ 11

Direct labor

4

Variable overhead

6

Fixed overhead ($272,000/34,000 units)

8

Total product cost per unit

$ 29

c Selling and administrative expenses consist of the following.

Selling and Administrative Expenses

Year 1

Year 2

Variable selling and administrative ($2 per unit sold)

$ 44,000

$ 92,000

Fixed selling and administrative

245,000

245,000

Total

$ 289,000

$ 337,000

Required:Prepare income statements for each of these two years under variable costing. (Loss amounts should be entered with a minus sign.)

Additional Information a. Sales and production data for these first two years follow. b. Variable costs per unit and fixed costs per year are unchanged during these years. The company's $29 per unit product cost using absorption costing consists of the following. c. Selling and administrative expenses consist of the following. c. Selling and administrative expenses consist of the following. Required: Prepare income statements for each of these two years under variable costing. (Loss amounts should be entered with a minus sign.)