Problem Dowell Company produces a single product. Its income statements under absorption costing for ts first two years of operation follow 2016 2017 Sales ($46 per unit) Cost of goods sold (331 per unit) Gross margin Sering and adrministrative expenses. $920,000 1,840,000 620,000140,000 00,000 300,000 290,000 S310000 260,000 Additional Information a. Sales and production data for these first two years follow 2016 2017 Units produod.. 000 30,000 b. Variable cost per unit and total fixed costs are unchanged during 2016 and 2017. The company's $31 per unit product cost consists of the following Direct matenals... Direct labor Variahle ovorhead Flxed ovethead 5300.000/30,000 unes) otol product cost per unit c. Selling and administrative expenses consist of the following 2016 2017 Variabie sellng and administrative expenses ($2.50runt. 550.000 $100.000 240000 240000 $290,000 $340,000 Tatal sellng and adinistrae expenses Required 1. Prepare income statements for the company for each of its first two years under variable costing 2. Explain any difference between the absorption costing income and the variable costing income for these two years