Kenzi Kayaking, a manufacturer of kayaks, began operations this year. During this first year, the company produced 1,000 kayaks and 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 (750 x $1,000) Cost of goods sold (750 x $425) Gross margin Selling and administrative expenses Net income $ 750,000 318,750 431,250 200,000 $ 231,250 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 $100,000 of fixed production costs allocated to the 1,000 kayaks produced. b. The $200,000 in selling and administrative expense consists of $75,000 that is variable and $125,000 that is fixed. Required: 1. Prepare an income statement for the current year under variable costing. 2. Fill in the blanks: Required 1 Required 2 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