Exercise 06-4 Variable costing income statement LO P2 Kenzi Kayaking, a manufacturer of kayaks, began operations this year. During this first year, the company produced 1,000 kayaks and sold 750 at a price of $1,000 each. At this first year-end, the company reported the following income statement information using absorption costing. Sales (750 $1,000) Cost of goods sold (750 x $400) Gross margin Selling and administrative expenses Net income $ 750,000 300,000 450,000 230,000 $ 220,000 Additional Information a. Product cost per kayak totals $400, which consists of $300 in variable production cost and $100 in fixed production cost-the latter amount is based on $100,000 of fixed production costs allocated to the 1,000 kayaks produced. b. The $230,000 in selling and administrative expense consists of $75,000 that is variable and $155,000 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 Total variable costs Contribution margin Less: Fixed expenses Fixed overhead costs Fixed selling and administrative costs Net income (loss) Net income under absorption costing is higher than net income under variable costing by: Fixed costs added to inventory (Required Required 2 > 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 fixed overhead per unit.