required info: Dowell Company produces a single product. its income statements under absortion costing for its two years of operation follow.. 2. what are the differences between the absorption costing income and the variable costing income for these two years?

Required information Problem 19-1A 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 Sales ($46 per unit) Cost of goods sold ($31 per unit) Gross margin Selling and administrative expenses Net income 2016 $920, eee 620, eee 380,80 290, eee $ 10,000 2017 $1,840, eee 1,240, eee 600, eee 340,000 $ 260, Additional Information a. Sales and production data for these first two years follow. Units produced Units sold 2016 30,eee 20,00 2017 3e, eae 40,000 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 materials Direct labor Variable overhead Fixed overhead (5300, eee/30,00 units) Total product cost per unit c. Selling and administrative expenses consist of the following Variable selling and administrative expenses (52.50 per unit) Fixed selling and administrative expenses Total selling and administrative expenses 2016 $ 50,000 240.000 $290,000 2017 $100,000 240.000 $340,000 Units produced Units sold 30,000 20, eee 3e, eee 40,eee 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 materials Direct labor Variable overhead Fixed overhead (5380,000/30,000 units) Total product cost per unit c. Selling and administrative expenses ist of the following Variable selling and administrative expenses ($2.50 per unit) Fixed selling and administrative expenses Total selling and administrative expenses 2016 2017 $ 50,000 $100,eee 240,000 240,000 $290,000 $340,000 Problem 19-1A 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 2016 2017 Variable costing income (loss) Absorption costing income (loss)