Check my work Pew Trez Company began operations this year. During this first year, the company produced 100,000 units and sold 80,000 units. The absorption costing income statement for this year follows. 10 points $3,200,000 eBook Sales (80,000 units x $40 per unit) Cost of goods sold Beginning inventory Cost of goods manufactured (100,000 units x $20 per unit) Cost of good available for sale Ending inventory (20,000 x $20) Cost of goods sold Gross margin Selling and administrative expenses Net income 2,000,000 2,000,000 400,000 Print References 1,600,000 1,600,000 580,000 $1,020,000 Additional Information a. Selling and administrative expenses consist of $400,000 in annual fixed expenses and $2.25 per unit in variable selling and administrative expenses. b. The company's product cost of $20 per unit is computed as follows. Direct materials Direct labor Variable overhead Fixed overhead ($800,000 / 100,000 units) $ 4 per unit $5 per unit $3 per unit $8 per unit Required: 1. Prepare an income statement for the company under variable costing. Required: 1. Prepare an income statement for the company under variable costing. TREZ Company Variable Costing Income Statement Sales $ 3,200,000 Direct labor Direct materials Variable overhead Variable selling and administrative expenses 400,000 320,000 240,000 180,000 1,140,000 Total variable costs Contribution margin Less: Fixed expenses Fixed overhead Fixed selling and administrative costs 800,000 400,000 1,200,000 Total fixed expenses Net income (loss)