Acctg 48-35841 . 2018 Str- Ch 19 Problem (s) Problem 19-2A Variable costing income statement and conversion to absorption costing income LO Trez Company began operations this year. During this first year, the company produced 100,000 units and sold 80,000 units. The absorption costing income statement for this year follows 3,200,000 Sales (80,000 units $40 per unit) Cost of goods sold Beginning inventory Cost of goods manuflactured (100,000 units x $20 per unit) 2 Cost of good available for sale 2,000,000 2,000,000 400,000 Ending memory (20,000-$20) Cost of goods sold 1,600,000 1,600,000 610,000 Gross margin Selling and administrative expenses Net income S 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 is computed as followns $ 3 per unt $ 8 per unit $ 3 per unt 6 per unt Drect materials Direct labor Variable overhead Flxed overhead ($600,000/100,000 units) Required: 1. Prepare an income statement for the company under variable costing TREZ Company Variable Costing Income Statement 5 2,112,000 esc 95 16