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, 425 bikes were produced and 255 were sold; this left 170 bikes in ending inventory. The income statement information under variable costing follows. Sales (255 * $1,725) Variable product cost (255 * $ 675) Variable selling and administrative expenses (255 * $55) Contribution margin Fixed overhead cost Fixed selling and administrative expense Net income $ 439,875 172, 125 14,025 253,725 80,750 85,000 $ 87,975 Prepare an income statement for the current year under absorption costing. KENZI KAYAKING Absorption Costing Income Statement Net income (loss) The dollar difference in variable costing income and absorption costing income = units X fixed overhead per unit