Kenzi, a manufacturer of kayaks, began operations this year. During this year, the company produced 1,025 kayaks and sold 775 at a price of $1,025 each. At year-end, the company reported the following income statement information using absorption costing.

Sales (775 $1,025)	$ 794,375
Cost of goods sold (775 $450)	348,750
Gross profit	445,625
Selling and administrative expenses	230,000
Income	$ 215,625

Additional Information

a. Product cost per kayak under absorption costing totals $450, which consists of $350 in direct materials, direct labor, and variable overhead costs and $100 in fixed overhead cost. Fixed overhead of $100 per unit is based on $102,500 of fixed overhead per year divided by 1,025 kayaks produced. b. The $230,000 in selling and administrative expenses consists of $95,000 that is variable and $135,000 that is fixed. an income statement for the current year under variable costing.

	KENZI
	Income Statement(Variable Costing)
Income