Required information 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 2016 2017 Sales ($48 per unit) Cost of goods sold ($33 per unit) Gross margin Selling and administrative expenses Net income $1,056,000 $2,016,000 726,000 1,386,000 630,000 334,500 $ 40,500 295,500 330,000 289,500 Additional Information a. Sales and production data for these first two years follow 2016 2017 32,000 32,000 Units produced Units sold 22,000 42,000 b. Variable cost per unit and total fixed costs are unchanged during 2016 and 2017. The company's $33 per unit product cost consists of the following Direct materials Direct labor Variable overhead Fixed overhead $320,000/32,000 10 $ 5 10 units) Total product cost per unit $33 c. Selling and administrative expenses consist of the following 2016 2017 Variable selling and administrative expenses ($2.25 per unit) Fixed selling and administrative expenses Total selling and administrative expenses $ 49,500 $ 94,500 240,000 240,000 $289,500 $334,500 Problem 6-1A Part 1 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.) DOWELL Company Variable Costing Income Statements 2016 2017 Sales 1,056,0002,016,000 Less: Variable costs Variable overhead Variable selling and administrative expenses Contribution margin Less: Fixed expenses Fixed overhead Fixed selling and administrative costs Net income (loss)