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. Income statement Information under variable costing follows. Sales (225 x $1,725) Variable cost of goods sold (225 x $625) Variable selling and administrative expenses (225 x $55) Contribution margin Fixed overhead Fixed selling and administrative expenses Income Prepare the company's Income statement under absorption costing. $ 388,125 140,625 12,375 235,125 52,500 90,000 $ 92,625 HAYEK BIKES Income Statement (Absorption Costing)