Dowell Company produces a single product. Its income statements under absorption costing for its first two years o operation follow. 2017 2016 Sales ($44per unit) Cost of goods sold ($29 per unit) Gross margin Selling and administrative expenses $968,000 $1,848,000 638,000 1,218,000 330,000 295,000 35,000 285,000 630,000 345,000 Net income Additional Information a. Sales and production data for these first two years follow. 2016 2017 Units produced 32,000 22,000 32,000 42,000 Units sold unchanged during 2016 and 2017. The company's $29 per unit b. Variable cost per unit and total fixed costs are product cost consists of the following. 4 Direct materials Direct labor 8 Variable overhead 7 Fixed overhead ($320,000/32,000 units) 10 $29 Total product cost per unit Selling and administrative expenses consist of the following. C. 2016 2017 Variable selling and administrative expenses ($2.5 per unit) Fixed selling and administrative expenses 55,000 $105,000 240,000 $295,000 $345,000 240,000 Total selling and administrative expenses 1. Complete income statements for the company for each of its first two years under variable costing. (Loss amounts should b entered witha minus sign.) DOWELL Company Variable Costing Income Statements 2016 2017 Problem 19-1A Part 2 2. What are the differences between the absorption costing income and the variable costing income for these two years? (Loss amounts should be entered with a minus sign.) DOWELL COMPANY Reconciliation of Variable Costing Income to Absorption Costing Income 2016 2017 Variable costing income (loss) |Absorption costing income (loss)