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 1,075 kayaks and sold 825 at a price of $1,075 each. At this first year-end, the company reported the following income statement information using absorption costing. $ Sales (825 * $1,075) Cost of goods sold (825 * $475) Gross margin Selling and administrative expenses Net income 886, 875 391,875 495,000 230,000 265,000 $ Additional Information a. Product cost per kayak totals $475, which consists of $375 in variable production cost and $100 in fixed production costthe latter amount is based on $107,500 of fixed production costs allocated to the 1,075 kayaks produced. b. The $230,000 in selling and administrative expense consists of $85,000 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: Required 1 Required 2 Prepare an income statement for the current year under variable costing. KENZI KAYAKING Variable Costing Income Statement Net income (loss) Drow 1 of 1 Nort Required 1 Required 2 --------------- Fill in the blanks: The dollar difference in variable costing income and absorption costing income = units x fixed overhead per unit. fixed overhead per unit