Income Statements (Absorption Costing) Sales (558 per unit) Cost of goods sold ($48 per unit) Gross profit Selling and administrative expenses Income Additional Information Year 1 $ 1,914,000 1,584,000 a. Sales and production data for these first two years follow. Year 2 $ 3,538,000 2,928,000 610,000 330,000 223,000 $ 107,000 251,000 $359,000 Units Units produced i Year 1 47,000 33,000 Year 2 47,000 61,000 Units sold b. Variable costs per unit and fixed costs per year are unchanged during these years. The company's $48 per unit product cost using absorption costing consists of the following. Direct materials Direct labor Variable overhead $ 17 17 Fixed overhead ($423,000/47,000 units) Total product cost per unit $ 48 c. Selling and administrative expenses consist of the following. Selling and Administrative Expenses Variable selling and administrative ($1 per unit sold) Fixed selling and administrative Total Year 1 Year 2 $ 61,000 190,000 $ 33,000 190,000 $223,000 $251,000