Problem 19-1A (Algo) Variable costing income statement for two consecutive years LO P2 Dowell Company produces a single product. Its income statements under absorption costing for its first two years of operation follow. Income Statements (Absorption Costing) Sales ($49 per unit) Cost of goods sold ($37 per unit) Gross profit Selling and administrative expenses Income Additional Information Year 1 $ 1,323,000 999,000 Year 2 $ 2,401,000 1,813,000 a. Sales and production data for these first two years follow. 324,000 264,000 588,000 308,000 $ 60,000 $ 280,000 Units Units produced Units sold Year 1 38,000 27,000 Year 2 38,000 49,000 b. Variable costs per unit and fixed costs per year are unchanged during these years. The company's $37 per unit product cost using absorption costing consists of the following. Direct materials Direct labor Variable overhead Fixed overhead ($304,000/38,000 units) Total product cost per unit $ 15 8 6 8 $ 37