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 x $1, 100) $ 935,000 cost of goods sold (850 x $475) 403, 750 Gross margin 531, 250 selling and administrative expenses 250,909 Net income 281, 250 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 $110,000 of fixed production costs allocated to the 1.100 kayaks produced. b. The $250.000 In selling and administrative expense consists of $105.000 that is variable and $145,000 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 S 935,000 Less: Variable costs Variable product costs Variable selling and administrative expenses Total variable costs Contribution margin Less: Fixed expenses Fixed overhead costs Fixed selling and administrative costs Net income (loss) Net income under absorption costing is higher than net income under variable costing by: Fixed costs added to inventory