ces Hayek Bikes prepares the income statement under variable costing for its managerial reports, and it prepares the income statement under absorption costing for external reporting. For its first month of operations, 350 bikes were produced and 225 were sold. Income statement information under variable costing follows. Sales (225 $1,775) Variable cost of goods sold (225 * $675) $399,375 151,875 Variable selling and administrative expenses (225 $60) Contribution margin 13,500 234,000 Fixed overhead Fixed selling and administrative expenses Income Prepare the company's income statement under absorption costing. 66,500 75,000 $ 92,500 HAYEK BIKES Income Statement (Absorption Costing) Sales $ 399,375 Cost of goods sold 196,875 Gross profit 202,500 Selling and administrative expenses 75,000 Income $ 127,500