Problem 6-1A Variable costing income statement and conversion to absorption costing income (two consecutive years) LO P2, P3 (The following information applies to the questions displayed below Dowell Company produces a single product. Its income statements under absorption costing for its first two years of operation follow. 2014 2015 Sales ($48 per unit) Cost of goods sold ($33 per unit) $ 1104.000 S 2.064,000 759,000 1419,000 Gross margin Selling and administrative expenses 345,000 645.000 302.500 352500 Net income $ 42.500 292.500 Additional Information a. Sales and production data for these first two years follow 2014 2015 83,000 33,000 Units produced Units sold 23,000 43000 b. Variable cost per unit and total fixed costs are unchanged during 2014 and 2015. The companys $33 per unit product cost consists of the following. Direct materials Direct labor 2014 33,000 33,000 23,000 43,000 2015 Units produced b. Variable cost per unit and total fixed costs are unchanged during 2014 and 2015. The company's $33 per unit product cost consists of the following $ 6 Direct materials Direct labor Variable overhead Total product cost per unt 5 33 c. Selling and administrative expenses consist of the following 2015 Variable selling and administrative expenses ($25 per unit) $57,500 S 107500 2014 Fixed selling and administrative expenses 245,000 245,000 Total selling and administrative expenses $302,500 $ 352,500 References Section Break Problem 6-1A 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 2014 2015 Variable costing income (loss) Add: Fixed overhead in ending inventory Less: Fixed overhead in beginning inventory Absorption costing income (loss) Rook & Resources 1. Complete income statements for the company for each of its first two years under variable costing. (Loss amounts should be entered with a minus sign.) LL Company Variable Costing Income Statements 2014 2015 Sales 1,104.000 S 2,064,000 ess: Variable costs Direct materials Direct labor Variable overhead Variable selling and administrative expenses 57,500107,500 Total variable costs ,523 107.514 ess: Fixed expenses 245,000 Fixed selling and administrative costs Fixed overhead 245,000 10 0 245,010 42.500$ 292.500 245,010 Total fixed expenses Net income (loss)