Trez Company began operations this year. During this year, the company produced 100,000 units and sold...

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Trez Company began operations this year. During this year, the company produced 100,000 units and sold 80,000 units. The absorption costing income statement for this year follows. Income Statement (Absorption Costing) Sales (80,000 units x $40 per unit) Cost of goods sold Gross profit Selling and administrative expenses Income $ 3,200,000 1,600,000 1,600,000 610,000 $ 990,000 Additional Information a. Selling and administrative expenses consist of $450,000 in annual fixed expenses and $2 per unit in variable selling and administrative expenses. b. The company's product cost of $20 per unit consists of the following. Direct materials Direct labor Variable overhead Fixed overhead ($700,000 100,000 units) Required: $ 5 per unit $ 6 per unit $ 2 per unit $ 7 per unit Prepare an income statement for the company under variable costing. TREZ Company Income Statement (Variable Costing) Sales $ 3,200,000 Less: Variable expenses Variable cost of goods sold $ 4,000,000 Variable selling and administrative expenses 480,000 Gross profit Less: Fixed expenses Fixed overhead Fixed selling and administrative costs Trez Company began operations this year. During this year, the company produced 100,000 units and sold 80,000 units. The absorption costing income statement for this year follows. Income Statement (Absorption Costing) Sales (80,000 units x $40 per unit) Cost of goods sold Gross profit Selling and administrative expenses Income $ 3,200,000 1,600,000 1,600,000 610,000 $ 990,000 Additional Information a. Selling and administrative expenses consist of $450,000 in annual fixed expenses and $2 per unit in variable selling and administrative expenses. b. The company's product cost of $20 per unit consists of the following. Direct materials Direct labor Variable overhead Fixed overhead ($700,000 100,000 units) Required: $ 5 per unit $ 6 per unit $ 2 per unit $ 7 per unit Prepare an income statement for the company under variable costing. TREZ Company Income Statement (Variable Costing) Sales $ 3,200,000 Less: Variable expenses Variable cost of goods sold $ 4,000,000 Variable selling and administrative expenses 480,000 Gross profit Less: Fixed expenses Fixed overhead Fixed selling and administrative costs

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