Direct material $4 per unit

Direct Labor $7 per unit

Variable overhead $3 per unit

Fixed overhead ( $600,00 / 100,000) $6 per unit

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. $3,2ee, eee Sales (80,000 units x $40 per unit) Cost of goods sold Beginning inventory Cost of goods manufactured (100,eee units x $20 per unit) Cost of good available for sale Ending inventory (20,880 x $20) Cost of goods sold Gross margin Selling and administrative expenses Net income 2, eee, eee 2,000, eee 4ee, eee 2. ee.ee 1, dee, eee 51e.ee $1, ese, eee Additional Information a. Selling and administrative expenses consist of $350,000 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 follows. 1. Prepare an income statement for the company under variable costing. TREZ Company Variable Costing Income Statement Net income (loss)