Dowell Company produces a single product. Its income statements under absorption costing for its first two years of operation follow. Sales ($46 per unit) Cost of goods sold ($31 per unit) Gross margin Selling and administrative expenses Net income 2018 $920,000 620,000 300,000 290.000 $ 10,000 2019 $1,840,000 1,240,000 600,000 340,000 $ 260,000 Additional Information a. Sales and production data for these first two years follow. Units produced Units sold 2018 30,000 20,000 2019 30,000 40,000 b. Variable cost per unit and total fixed costs are unchanged during 2018 and 2019. The company's $31 per unit product cost consists of the following Direct materials Direct labor Variable overhead Fixed overhead ($300,000/30,000 units) Total product cost per unit $5 9 7 le $31 c. Selling and administrative expenses consist of the following. Variable selling and administrative expenses ($2.58 per unit) Fixed selling and administrative expenses Total selling and administrative expenses 2018 2019 $ 50,000 $100,000 240.000 240,000 $ 290,000 $340,000 Required: 1. Prepare income statements for the company for each of its first two years under variable costing. (Loss amounts should be entered with a minus sign.) DOWELL Company Variable Costing Income Statements 2018 2019 Net Income (oss) 2. Prepare a table as in Exhibit 6.12 to convert variable costing income to absorption costing income for both 2018 and 2019. (Loss amounts should be entered with a minus sign.). DOWELL COMPANY Reconciliation of Variable Costing Income to Absorption Costing Income 2018 2019 Variable costing Income (loss) Absorption costing Income (loss)