John Company produces hats and sells them for $100 each. His cost to produce the hats are: DM 20 per unit DL 30 per unit VMOH 10 per unit FMOH 40,000 Selling expenses are $5 per unit and are all variable. Administrative expenses of 25,000 are all fixed. John produced 5,000 hats; sold 4,000; and had no beginning inventory. Complete the income statement and calculation of net income under variable costing. Variable Costing Income Statement Variable expenses: Direct materials Direct labor 120,000 Variable Cost of Goods Sold Variable selling expenses Total variable expenses 260,000 140,000 Fixed Expenses: Fixed manufacturing overhead 25,000 65,000 Net income 75,000