Company XYZ has the following costs and activities associated with the production and sale of one of its products: Direct material $3.00 / unit Fixed OH (total) $200,000 Direct labor $2.50 / unit Fixed expenses (total) $75,000 Var. OH $1.80 / unit Production 55,000 units Var. expenses $0.25 / unit Sales 48,000 units Selling price $25 / unit Management estimates the annual capacity to be 50,000. Prepare the income statement based on variable costing.