Kenzi Kayaking, a manufacturer of kayaks, began operations this year. During this first year, the company produced 1,100 kayaks and sold 850. at a price of $1,100 each. At this first year-end, the company reported the following income statement information using absorption costing Sales (850$1,100) Cost of goods sold (850 $425) Gross margin Selling and administrative expenses Net income $ 935,000 361,250 573,750 220,000 353,750 Additional Information a. Product cost per kayak totals $425, which consists of $325 in variable production cost and $100 in fixed production cost-the latter amount is based on $110,000 of fixed production costs allocated to the 1,100 kayaks produced. b. The $220,000 in selling and administrative expense consists of $95,000 that is variable and $125,000 that is fixed. Required 1. Prepare an income statement for the current year under variable costing. KENZI KAYAKING Variable Costing Income Statement Required 1. Prepare an income statement for the current year under variable costing. 7 KENZI KAYAKING Variable Costing Income Statement 342) :54:27 Net income (loss)