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, 375 bikes were produced and 225 were sold; this left 150 bikes in ending inventory. The income statement information under variable costing follows. Sales (225 * $1,750) Variable product cost (225 * $650) Variable selling and administrative expenses (225 * $55) Contribution margin Fixed overhead cost Fixed selling and administrative expense Net income $ 393,750 146,250 12,375 235, 125 71,250 95,000 $ 68,875 1. Prepare this company's income statement for its first month of operations under absorption costing. 2. Fill in the blanks: 1. Prepare this company's income statement for its first month of operations under absorption costing. 2. Fill in the blanks: Complete this question by entering your answers in the tabs below. Required 1 Required 2 Prepare an income statement for the current year under absorption costing. KENZI KAYAKING Absorption Costing Income Statement $ 393,750 Sales Less: Cost of goods sold Variable product costs Fixed overhead costs 1 $ 146,250 71,250 217,500 176,250 Cost of goods sold Gross margin Selling general and administrative expenses Fixed selling and administrative costs Variable selling and administrative expenses $ 95,000 12,375 Total selling general and administrative expenses Net income (loss) 107,375 68,875 $ Net income under absorption costing is higher than net income under variable costing by: Fixed costs added to inventory Complete this question by entering your answers in the tabs below. Required 1 Required 2 Fill in the blanks: The dollar difference in variable costing income and absorption costing income = units * fixed overhead per unit.