Kenzi, a manufacturer of kayaks, began operations this year. During this year, the company produced 1,075 kayaks and sold 825 at a price of $1,075 each. At year-end, the company reported the following income statement information using absorption costing.

Sales (825 $1,075)	$ 886,875
Cost of goods sold (825 $425)	350,625
Gross profit	536,250
Selling and administrative expenses	220,000
Income	$ 316,250

Additional Information

a. Product cost per kayak under absorption costing totals $425, which consists of $325 in direct materials, direct labor, and variable overhead costs and $100 in fixed overhead cost. Fixed overhead of $100 per unit is based on $107,500 of fixed overhead per year divided by 1,075 kayaks produced. b. The $220,000 in selling and administrative expenses consists of $75,000 that is variable and $145,000 that is fixed. income statement for the current year under variable costing.