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 Sales ($46 per unit) Cost of goods sold ($31 per unit) Gross margin Selling and administrative expenses Net Income 2016 2017 $1,184,800 $2,024,000 744.000 1.364.699 360.ee 660.ee 299,eee 344.ee $ 61,600 $ 316,000 Additional Information a. Sales and production data for these first two years follow Units produced Units sold 2016 2017 34.000 34.000 24.ee 44.ee 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 ($340,000/34, eee units) Total product cost per unit c. Seling and administrative expenses consist of the following. Variable selling and administrative expenses ($2.25 per unit) Fixed selling and administrative expenses Total selling and administrative expenses 2016 2017 $ 54.eee $ 99.ece 245.000 245 cee $299,000 $344.ee 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.) Answer is not complete. DOWELL Company Variable Costing Income Statements 2016 2017 1.104.000 2.024.000 Sales Less: Variable costs Direct materials Direct labor Variable overhead Variable selling and administrative 120.000 192.000 192.000 42.000 220.000 352.000 352.000 77.000 expenses Total variable costs Contribution margin Less: Fored expenses 5 0 48.000 558.000 1.001,000 1,023,000 Forced selling and administrative costs Fixed overhead Net income (loss) S (45,000) X $ 316,000 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) 42.000 Absorption costing income (loss)