Hayek Bikes prepares the income statement under variable costing for its managerial reports, and it prepares the income statemen under absorption costing for external reporting. For its first month of operations, 350 bikes were produced and 225 were sold. Inco statement information under variable costing follows. Sales (225 x $1,725) Variable cost of goods sold (225 x $700) Variable selling and administrative expenses (225 $60) Contribution margin Fixed overhead Fixed selling and administrative expenses Income Prepare the company's income statement under absorption costing. HAYEK BIKES Income Statement (Absorption Costing) Sales Cost of goods sold Gross profit Selling and administrative expenses Income $ $ 388,125 388,125 98,500 289,625 $ 388,125 157,500 13,500 217,125 66,500 85,000 $ 65,625

Hayek Bikes prepares the income statement under variable costing for its managerial reports, and it preparos the income stateme under absorption costing for oxtemal reporting. For its first month of operations, 350 bikes were produced and 225 were sold. Ine statement information under variable costing follows. Prepare the company's income statement under absorption costing