Problem $19-1$A $($Algo$)$ Variable costing income statement for two consecutive years LO P$2$

Dowell Company produces a single product. Its income statements under absorption costing for its first two years of operation follow.

Income Statements $($Absorption Costing$)$ Year $1$ Year $2$

Sales $($$$53$ per unit$)$ $ $1,113,000$ $ $3,339,000$

Cost of goods sold $($$$38$ per unit$)798,0002,394,000$

Gross profit $315,000945,000$

Selling and administrative expenses $282,000366,000$

Income $ $33,000$ $ $579,000$

Additional Information

Sales and production data for these first two years follow.

Units Year $1$ Year $2$

Units produced $42,00042,000$

Units sold $21,00063,000$

Variable costs per unit and fixed costs per year are unchanged during these years. The company's $$38$ per unit product cost using absorption costing consists of the following.

Direct materials $ $12$

Direct labor $12$

Variable overhead $6$

Fixed overhead $($$$336,000/42,000$ units$)8$

Total product cost per unit $ $38$

Selling and administrative expenses consist of the following.

Selling and Administrative Expenses Year $1$ Year $2$

Variable selling and administrative $($$$2$ per unit sold$)$ $ $42,000$ $ $126,000$

Fixed selling and administrative $240,000240,000$

Total $ $282,000$ $ $366,000$

Required:

Prepare income statements for each of these two years under variable costing. $($Loss amounts should be entered with a minus sign.$)$