Kenzi Kayaking, a manufacturer of kayaks, began operations this year. During this first year, the company produced 1,050 kayaks and sold 800 at a price of $1,050 each. At this first year-end, the company reported the following income statement information using absorption costing. $ Sales (800 x $1,050) Cost of goods sold (800 x $450) Gross margin Selling and administrative expenses Net income 840,000 360,000 480,000 220,000 260,000 $ Additional Information a. Product cost per kayak totals $450, which consists of $350 in variable production cost and $100 in fixed production cost-the latter amount is based on $105,000 of fixed production costs allocated to the 1,050 kayaks produced. b. The $220,000 in selling and administrative expense consists of $85,000 that is variable and $135,000 that is fixed. Required: 1. Prepare an income statement for the current year under variable costing. 2. Fill in the blanks: Prepare an income statement for the current year under variable costing. KENZI KAYAKING Variable Costing Income Statement Net income (loss) The dollar difference in variable costing income and absorption costing income = units * fixed overhead per unit