eBook Dowell Company produces a single product. Its income statements under absorption costing for its first two years of operation follow. Income Statements (Absorption Costing) Sales ($61 per unit) Cost of goods sold ($47 per unit) Gross profit Selling and administrative expenses Income Additional Information Year 1 $1,769,000 Year 2 $ 4,331,000 1,363,000 406,000 3,337,000 276,000 $130,000 360,000 $634,000 . Sales and production data for these first two years follow. 994,000 Print Units Year 1 ferences Units produced Units sold 50,000 29,000 Year 2 50,000 71,000 b. Variable costs per unit and fixed costs per year are unchanged during these years. The company's $47 per unit product cost using absorption costing consists of the following. Direct materials Direct labor Variable overhead Fixed overhead ($400,000/50,000 units) Total product cost per unit 5.13 20 6 $47 c. Selling and administrative expenses consist of the following. Selling and administrative Expenses Variable selling and administrative ($2 per unit sold) Fixed selling and administrative Year 1 $ 58,000 218,000 $276,000 Year 2 $142,000 210,000 $360,000 Total Required: Prepare income statements for each of these two years under variable costing. (Loss amounts should be entered with a minus sign.) Direct materials Direct labor Variable overhead Fixed overhead ($400,000/50,000 units) $13 20 6 8 $47 Total product cost per unit c. Selling and administrative expenses consist of the following. Selling and Administrative Expenses Variable selling and administrative ($2 per unit sold) Fixed selling and administrative Total Year 1 $ 58,000 218,000 $ 276,000 Year 2 $ 142,000 218,000 $360,000 Required: Prepare income statements for each of these two years under variable costing. (Loss amounts should be entered with a minus sign. DOWELL Company Income Statements (Variable Costing) Year 1 Year 2 $1,769,000 $4,331.000 Sales Less: Variable expenses Variable cost of goods sold Variable selling and administrative expenses 58.000 142,000 Contribution margin Less: Fixed expenses Fixed overhead Fixed selling and administrative expenses Income (Loss)