19-1A Variable costing income statement for two consecutive years P2 Dowell Company produces a single product. Its income statements under absorption costing for its first two years of operation follow. Additional Information Income Statements (Absorption Costing) Year 1 Year 2 Sales ($46 per unit) $920,000 $1,840,000 Gross profit Cost of goods sold ($31 per unit) Selling and administrative expenses Income 620,000 1,240,000 300,000 600,000 170,000 220,000 $130,000 $ 380,000 a. Sales and production data for these first two years follow. Units Year 1 Year 2 Units produced Units sold 30,000 30,000 20,000 40,000 b. Variable costs per unit and fixed costs per year are unchanged during these years. The company's $31 per unit product cost using absorption costing consists of the following. Direct materials $5 Direct labor 9 Variable overhead 7 Fixed overhead ($300,000/30,000 units) Total product cost per unit 10 $31 c. Selling and administrative expenses consist of the following. Selling and Administrative Expenses Year 1 Year 2 Variable selling and administrative ($2.50 per unit sold) Fixed selling and administrative $50,000 $100,000 120,000 120,000 Total $170,000 $220,000 Required Prepare income statements for each of these two years under variable costing