Exercise 19-6 Absorption costing income statement LO P2 Hayek Bikes prepares the income statement under variable costing for its managerial reports, and it prepares the income statement under absorption costing for external reporting. For its first month of operations, 400 bikes were produced and 240 were sold; this left 160 bikes in ending inventory. The income statement information under variable costing follows. Sales (240 x $1,600) Variable product cost (240 x $650) Variable selling and administrative expenses (240 x $70) Contribution margin $ 384,000 156,000 16,800 211,200 Fixed overhead cost 64,000 Fixed selling and administrative expense 95,000 52,200 Net income 1. Prepare this company's income statement for its first month of operations under absorption costing. (Round your intermediate calculations to the nearest whole dollar.) HAYEK BIKES Absorption Costina Income Statement ES Absorption Costing Income Statement 384,000 Sales $ Less: Cost of goods sold Variable product costs 156,000 64,000 Fixed overhead costs Cost of goods sold 220,000 Gross margin 164,000 Selling general and administrative expenses Fixed selling and administrative costs 95,000 Variable selling and administrative expenses 16,800 Total selling general and administrative expenses 111,800 Net income (loss) $ 52,200 Net income under absorption costing is higher than net income under variable costing by $ 111.500 Number of units added to(subtracted from) inventory 160 Fixed overhead cost per unit Fixed costs added to inventory