Exercise 6-4 Variable costing income statement LO P2 Kenzi Kayaking, a manufacturer of kayaks, began operations this year. During this first year, the company produced 1,100 kayaks and sold 850. at a price of $1,100 each. At this first year-end, the company reported the following income statement information using absorption costing Sales (850 x $1,100) Cost of goods sold (850 x $425) Gross margin Selling and administrative expenses Net income $ 935,000 361,258 573,750 220,908 353,750 Additional Information a. Product cost per kayak totals $425, which consists of $325 in variable production cost and $100 in fixed production cost-the latter amount is based on $110,000 of fixed production costs allocated to the 1,100 kayaks produced. b. The $220,000 in selling and administrative expense consists of $85,000 that is variable and $135,000 that is fixed. Required 1. Prepare an income statement for the current year under variable costing. a. Product cost per kayak totals $425, which consists of $325 in variable production cost and $100 in fixed production cost-the latter amount is based on $110,000 of fixed production costs allocated to the 1,100 kayaks produced. b. The $220,000 in selling and administrative expense consists of $85,000 that is variable and $135,000 that is fixed. Required 1. Prepare an income statement for the current year under variable costing. KENZI KAYAKING Variable Costing Income Statement Net income (loss)