Required information Problem 19-1A Variable costing income statement and conversion to absorption costing income (two consecutive years) LO P2, P3 [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 (531 per unit) Gross margin Selling and administrative expenses Net income 2016 $920,000 620,000 300,000 290,000 $ 10,000 2017 $1,840,000 1.240,000 600,000 340,000 $ 260,000 Additional Information a. Sales and production date for these first two years follow Units produced Units sold 2016 30,000 20,000 2017 30,000 40,000 b. Variable cost per unit and total fixed costs are unchanged during 2016 and 2017. The company's $31 per unit product - nelere of the following. Direct materials Direct labor Variable overhead Fixed overhead ($300,000/30,000 units) Total product cost per unit $ 5 9 7 10 $31 c. Selling and administrative expenses consist of the following 2016 2017 $ 50,000 $100,000 240,000 240,000 $ 290,000 $340,000 Variable selling and administrative expenses ($2.50 per unit) Fixed selling and administrative expenses Total selling and administrative expenses DOWELL Company Variable Costing Income Statements 2016 2017 06 Sales S 920.000 1.840,000 Less: Variable costs Direct labor Direot materials Variable selling and administrative expenses Variable overhead Contribution margin Less: Fixed expenses Fixed overhead Fixed selling and administrative costs Net income (loss