Required information [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 ($46 per unit) Cost of goods sold ($31 per unit) Gross margin Selling and administrative expenses Net income $920,000 $1,840,000 620,000 1,240,000 600,000 340,000 $ 10,000 260,000 300,000 290,000 Additional Information a. Sales and production data for these first two years follow 2016 30,000 30,000 20,000 40,000 2017 Units produced Units sold 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 ($300,000/30,000 units) Total product cost per unit 9 10 $31 c. Selling and administrative expenses consist of the following 2016 2017 Variable selling and administrative expenses ($2.50 per unit) Fixed selling and administrative expenses Total selling and administrative expenses $ 50,000 $100,000 240,000 240,000 $290,000 $340,000