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, 350 bikes were produced and 225 were sold; this left 125 bikes in ending inventory. The income statement information under variable costing follows. Sales (225 $1,625) Variable product cost (225 $600) Variable selling and administrative expenses (225 Contribution margin Fixed overhead cost $365,625 135,000 $55) 12,375 218,250 66,500 80,000 $ 71,750 Fixed selling and administrative expense Net income 1. Prepare this company's income statement for its first month of operations under absorption costing. (Round your intermediate calculations to the nearest whole dollar) calculations to the nearest whole dollar.) HAYEK BIKES Absorption Costing Income Statement Sales $ 365,625 Less: Cost of goods sold Variable product costs Fixed overhead costs 135,000 $ Cost of goods sold Gross margin Selling general and administrative expenses Variable selling and administrative expenses Fixed selling and administrative costs 135,000 12,375 80,000 Total selling general and administrative expenses Net income (loss) 92.375 Net income under absorption costing is higher than net income under variable costing by Fixed costs added to inventory