Check my Problem 19-2A Variable costing income statement and conversion to absorption costing income LO P2, P3 Trez Company began operations this year During this first year, the company produced 100.000 units and sold 8000 units. The absorption costing income statement for this year follows Sales (0,00e units $45 per unit) Cost of goods sold Beginning inventory cost of goods marufactured (300,000 units x $25 per unit) Cost of good available for sale tnding investory (20,000 x $25) Cost of goods sold Gross margin Selling and adeinistrative expenses $1,600,000 2,s0,00 2,0,000 2,000,000 1-600,o00 sa0,a00 Net income $1,020,000 Additional Informetion a. Selling and administrative expenses consist of $400,000 in annual fxed expenses and $2 25 per unit in variable selling and administrative expenses b. The company's product cost of $25 per unit is computed as follows. oirect materials bire Iatr Variable overtead Fixed overhead ($700,000 100,000 units) ss per unit $10 per unit 33 per unit $.7 per unit Required: 1. Prepare an income statement for the company under variable costing TREZ Company Variable Costing income Statement $ 3,500,000 Sales Less Varabie costs Direct manenalse Oirect iabor Variable overhead Variable selling and administrative expenses Less: Fixed expenses Ped ovehead FOed seling and administrative costs Net income doss)