19 - Homework Saved Help Save & 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. 201 Sales ($48 per unit) Cost of goods sold ($33 per unit) Gross margin Selling and administrative expenses Net income $1,152,000 $2,112,000 792,000 1,452,000 60,000660,000 3 05,000355,000 $ 55,000 305,000 Additional Information a. Sales and production data for these first two years follow Units produced Units sold 2016 11 2017 34,000 34,000 24,000 44,000 b. Variable cost per unit and total fxed 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 ($340,000/34,000 units 10 Next > Prev | 1 2 of 2 er 19- Homework Saved Help Save D. Vanaole cos cost consists of the following. per unit ana tota' mea costs are uncnangea auring ano ana sul, ne company s ss Direet materials Direct labor Variable overhead Fixed overhead ($340,000/34,000 units) Total product cost per unit f 2 $ 6 10 $33 c. Selling and administrative expenses consist of the following. Variable selling and administrative expenses ($2.5 per unit) Fixed selling and administrative expenses Total selling and administrative expenses 60,000 $110,000 245,000245,000 $305, 000 $355,000 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.) Variable Costing Income Sta 2016 2017 Sales 1.152,000 2,11200o Less: Variable costs Prev | 1 2 | of 2 Next > 1. Complete income statements for the company for each of ts first two years under variable costing. Loss amounts shou entered with a minus sign.) Part 1 of 2 Answer is complete but not entirely correct. 35 points DOWELL Company Variable Costing Income Sta 2016 2017 Sales 1,152000 2,112000 Less: Variable costs Direct materials Direct labor Variable overhead 144,000 264,000 216,000396,000 216,000396,000 0 Variable selling and administrative 48,000 88,000 Total variable costs Contribution margin Less: Fixed expenses 624,000 1,144,000 552,000 1.012.0000 Fixed seling and adminstralive costs 245,000245.0000 Fixed overhead 340,000340,000 Total fixed expenses Net income (loss) 585,000 585,000 $ (33,000) s 427,000 2 c. Selling and administrative expenses consist of the following. Part 2 of 2 016 variable selling and administrative expenses ($2.5 per unit) Pixed selling and administrative expenses Total selling and administrative expenses 60,000 $110,000 245,000 245,000 $305,000 $355,000 35 points 2. What are the differences between the absorption costing income and the variable costing income for these two years? (Loks amounts should be entered with a minus sign.) Answer is complete but not entirely correct DOWELL COMPANY Reconciliation of Variable Costing Income to Absorption Costing Income 2016 2017 (39,000) 100,000 416,000 x Variable costing income (loss) Add: Fixed overhead in ending Less Fixed overhead in beginning Absorption costing income (loss) 100.000) 67,000 327,000