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, 375 bikes were produced and 225 were sold; this left 150 bikes in ending inventory. The income statement information under variable costing follows. Sales (225 x $1,600) Variable product cost (225 x $625) Variable selling and administrative expenses (225 x $65) Contribution margin Fixed overhead cost 23 Fixed selling and administrative expense Net income $360,000 140,625 14,625 204,750 56,25 75,000 73,500 1. Prepare this company's income statement for its first month of operations under absorption costing. COS * Answer is complete but not entirely correct. HAYEK BIKES Absorption Costing Income Statement Search OH 9 CO 185,625 174,375 Cost of goods sold Gross margin Selling general and administrative expenses Fored seling and administrative costs Variable selling and administrative expenses 85,000 % 12,375 X Total selling general and administrative expenses Net income (loss) 97,375 77,000 $ 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 Fixed costs added to inventory $ 25,000 125 X 200 X 525.000 Ogos