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, 350 bikes were produced and 225 were sold this left 125 bikes in ending inventory. The income statement information under variable costing follows Sales (225 * $1,800) Variable product cost (225 * $700) Variable selling and administrative expenses (225 x 560) Contribution margin Fixed overhead cost Fixed selling and administrative expense Net income $ 405,000 157,500 13.500 234.900 63,000 BONO $ 91,000 1. Prepare this company's income statement for its first month of operations under absorption costing 2. Fill in the blanks 405,000 Sales Less: Cost of goods sold Variable product costs Fixed overhead costs 157,500 40,500 198,000 207,000 Cost of goods sold Gross margin Selling general and administrative expenses Fixed selling and administrative costs Variable selling and administrative expenses 80,000 13,500 Total selling general and administrative expenses Net income (loss) 93,500 77,000 $ 25,000 X Net income under absorption costing is higher than net income under variable costing by Number of units added to(subtracted from) inventory Fixed overhead cost per unit Fived rests added to inventory 125 A A 180 22.500 The dollar difference in variable costing income and absorption costing income 200 X units $ 200 fixed overhead per unit