Exercise 19-4 Variable costing income statement LO P2 Kenzi Kayaking, a manufacturer of kayaks, began operations this year. During this first year, the company produced 1000 kayaks and sold 750. at a price of $1,000 each. At this first year-end, the company reported the following income statement information using absorption costing. $ Sales (750 * $1,000) Cost of goods sold (750 x $450) Gross margin Selling and administrative expenses Net income 750,000 337,500 412,500 250,000 162,500 $ Additional Information a. Product cost per kayak totals $450, which consists of $350 in variable production cost and $100 in fixed production cost-the latter amount is based on $100,000 of fixed production costs allocated to the 1,000 kayaks produced b. The $250,000 in selling and administrative expense consists of $105,000 that is variable and $145,000 that is fixed. Required 1. Prepare an income statement for the current year under variable costing. KENZI KAYAKING Variable Costing Income Statement Sales $ 750,000 Less: Variable costs Variable product costs Variable selling and administrative expenses Total variable costs Contribution margin b. The $250,000 in selling and administrative expense consists of $105,000 that is variable and $145,000 that is fixed. Required 1. Prepare an income statement for the current year under variable costing. $ 750,000 KENZI KAYAKING Variable Costing Income Statement Sales Less: Variable costs Variable product costs Variable selling and administrative expenses Total variable costs Contribution margin Fixed overhead costs Fixed selling and administrative costs Net income (loss) Fixed costs added to inventory