Question 1 (50 points) Dowell Company produces a single product. Cost and sales information its first two years of operations are summarized below. 2016 2017 $1,840,000 $920,000 620,000 1.240,000 Sales ($46 per unit) Cost of Goods Sold ($31 per unit) Gross Margin Selling & Admin Expenses Net Income 300,000 600,000 290.000 340,000 $10,000 $ 260,000 Additional information a. Units produced 30,000 30,000 Units sold 20,000 40,000 b. Variable cost in unchanged between 2016 and 2017 Direct Materials $8 Direct Labor 9 Variable OH 7 Fixed OH 10 Product cost per unit. $31 c. Selling and Admin expenses 2016 2017 Variable selling expenses $50,000 $100,000 2016 2017 C. Selling and Admin expenses Variable selling expenses Fixed selling & admin Total selling & admin expenses $ 50,000 240,000 $100,000 240,000 $340,000 $290,000 . Prepare an income statement for the company for 2016 under variable costing. Prepare an income statement for the company for 2017 under variable costing. Explain the source(s) of the difference in reported income for 2016 under the two costing methods. . Paragraph BI U V A UA/ co + v .. M