Kenzi Kayaking, a manufacturer of kayaks, began operations this year. During this first year, the company produced 1,000 kayaks sold 750 at a price of $1,000 each. At this first year-end, the company reported the following income statement information using absorption costing. Sales (750x$1,000) Cost of goods sold (750 x $475) Gross margin Selling and administrative expenses Net income $ 750,000 356,250 393,750 250,000 $ 143,750 Additional Information a. Product cost per kayak totals $475, which consists of $375 in variable production cost and $100 in fixed production cost-the la amount is based on $100,000 of fixed production costs allocated to the 1,000 kayaks produced. b. The $250,000 in selling and administrative expense consists of $95,000 that is variable and $155,000 that is fixed. Required: 1. Prepare an income statement for the current year under variable costing. 2. Fill in the blanks: Answer is complete but not entirely correct. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Additional Information a. Product cost per kayak totals $475, which consists of $375 in variable production cost and $100 in fixed production cost-the latter amount is based on $100,000 of fixed production costs allocated to the 1,000 kayaks produced. b. The $250,000 in selling and administrative expense consists of $95,000 that is variable and $155,000 that is fixed. Required: 1. Prepare an income statement for the current year under variable costing. 2. Fill in the blanks: Answer is complete but not entirely correct. Complete this question by entering your answe nswers in the tabs below. Required 1 Required 2 Fill in the blanks: fixed overhead per The dollar difference in variable costing income and absorption costing income 3.000 units Prepare an income statement for the current year under variable costing. KENZI KAYAKING Variable Costing Income Statement Sales Less: Variable costs Variable product costs Variable selling and administrative expenses Total variable costs Contribution margin 281,250 95,000 Less: Fixed expenses Fixed overhead costs S 100,000 Fixed selling and administrative costs 155,000 Total fixed expenses Net income (loss) 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 750,000 376,250 373,750 255,000 $ 118,750 25,000 250 $ 100 $ 25,000