Kenzi Kayaking, a manufacturer of kayaks, began operations this year. During this first year, the company produced 1,075 kayaks and sold 825 at a price of $1,075 each. At this first year-end, the company reported the following income statement information using absorption costing. $ Sales (825 x $1,075) Cost of goods sold (825 x $500) Gross margin Selling and administrative expenses Net income 886,875 412,500 474,375 230,000 244,375 $ Additional Information a. Product cost per kayak totals $500, which consists of $400 in variable production cost and $100 in fixed production cost-the latter amount is based on $107,500 of fixed production costs allocated to the 1,075 kayaks produced. b. The $230,000 in selling and administrative expense consists of $95,000 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: Complete this question by entering your answers in the tabs below. Required 1 Required 2 Prepare an income statement for the current year under variable costing. KENZI KAYAKING Variable Costing Income Statement Sales $ 886,875 Less: Variable costs Variable product costs Variable selling and administrative expenses $ 330,000 95,000 425,000 461,875 Total variable costs Contribution margin Less: Fixed expenses Fixed selling and administrative costs Fixed overhead costs $ 135,000 107,500 Total fixed expenses Net income (loss) 242,500 219,375 $ [Net income under absorption costing is higher than net income under variable costing by Fixed costs added to inventory Required 1 Required 2 > Complete this question by entering your answers in the tabs below. Required 1 Required 2 Fill in the blanks: The dollar difference in variable costing income and absorption costing income = 1 units fixed overhead per unit. Required 1 Required 2 >