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, 400 bikes were produced and 240 were sold; this left 160 bikes in ending inventory. The income statement information under variable costing follows. Sales (240 x $1,775) Variable product cost (240 x $625) Variable selling and administrative expenses (240 x $60) Contribution margin Fixed overhead cost Fixed selling and administrative expense Net income $ 426,000 150,000 14,400 261,600 72,000 80,000 $ 109,600 1. Prepare this company's income statement for its first month of operations under absorption costing. 2. Fill in the blanks: Prepare an income statement for the current year under absorption costing. KENZI KAYAKING Absorption Costing Income Statement Sales $ 426,000 Less: Cost of goods sold Variable product costs Fixed overhead costs $ 150,000 150,000 Net income (loss) Fixed costs added to inventory The dollar difference in variable costing income and absorption costing income = units X fixed overhead per unit