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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 1,025 kayaks and sold 775 at a price of $1,025 each. At this first year-end, the company reported the following income statement Information using absorption costing $ Sales (775 X $1,025) Cost of goods sold (775 X $500) Gross margin Selling and administrative expenses Net income 794,375 387,500 406,875 250,000 156,875 3 Additional Information a. Product cost per kayak totals $500, which consists of $400 in variable production cost and $100 in fixed production cost-the latter amount is based on $102,500 of fixed production costs allocated to the 1,025 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 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 variable costing, KENZI KAYAKING Variable Costing Income Statement Sales Less Variable costs Variable product costs Variable selling and administrative expenses $ 794 375 310,000 250.000 Contribution margin Less: Fixed expenses Fbeed selling and administrative costs Fixed overhead costs 560,000 243,375 145,000 102 500 Total forced expenses Net income (loss) 247,500 (4,125) $ Net income under absorption costing is higher than net income under variable costing by Fixed costs added to inventory Required 2 > 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 1,025 kayaks and sold 775 at a price of $1,025 each. At this first year-end, the company reported the following income statement information using absorption costing Sales (775 * $1,825) Cost of goods sold (775 * $500) Gross margin Selling and administrative expenses Net income $ 794,375 387,500 406,875 250,000 $ 156,875 Additional Information .. Product cost per kayak totals $500, which consists of $400 in variable production cost and $100 in fixed production cost-the latter amount is based on $102,500 of fixed production costs allocated to the 1,025 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. 2 Fill in the blanks 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 i fixed overhead per unit