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 2018 2019 Sales ($46 per unit) $ 1,104,000 $ 2,024,000 Cost of goods sold ($31 per unit) 744,000 1,364,000 Gross margin 360,000 660,000 Selling and administrative expenses 282,000 317,000 Net income $ 78,000 $ 343,000 Additional Information Sales and production data for these first two years follow 2018 2019 Units produced 34,000 34,000 Units sold 24,000 44,000 Variable cost per unit and total fixed costs are unchanged during 2018 and 2019 The company's $31 per unit product cost consists of the following Direct materials $ 5 Direct labor 9 Variable overhead 7 Fixed overhead ($340,000 34,000 units) 10 Total product cost per unit $ 31 Selling and administrative expenses consist of the following 2018 2019 Variable selling and administrative expenses ($1 75 per unit) $ 42,000 $ 77,000 Fixed selling and administrative expenses 240,000 240,000 Total selling and administrative expenses $ 282,000 $ 317,000 Problem 19 1A Part 2 2 Prepare a table as in Exhibit 19 12 to convert variable costing income to absorption costing income for both 2018 and 2019 (Loss amounts should be entered with a minus sign )

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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

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.

		2018		2019
Sales ($46 per unit)	$	1,104,000	$	2,024,000
Cost of goods sold ($31 per unit)		744,000		1,364,000
Gross margin		360,000		660,000
Selling and administrative expenses		282,000		317,000
Net income	$	78,000	$	343,000

Additional Information

Sales and production data for these first two years follow.

	2018	2019
Units produced	34,000	34,000
Units sold	24,000	44,000

Variable cost per unit and total fixed costs are unchanged during 2018 and 2019. The company's $31 per unit product cost consists of the following.


Direct materials	$	5
Direct labor		9
Variable overhead		7
Fixed overhead ($340,000/34,000 units)		10
Total product cost per unit	$	31

Selling and administrative expenses consist of the following.

		2018		2019
Variable selling and administrative expenses ($1.75 per unit)	$	42,000	$	77,000
Fixed selling and administrative expenses		240,000		240,000
Total selling and administrative expenses	$	282,000	$	317,000

Problem 19-1A Part 2

2. Prepare a table as in Exhibit 19.12 to convert variable costing income to absorption costing income for both 2018 and 2019. (Loss amounts should be entered with a minus sign.)