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 $1,075)	$	886,875
Cost of goods sold (825 $400)		330,000
Gross margin		556,875
Selling and administrative expenses		210,000
Net income	$	346,875

Additional Information

1. Product cost per kayak totals $400, which consists of $300 in variable production cost and $100 in fixed production costthe latter amount is based on $107,500 of fixed production costs allocated to the 1,075 kayaks produced.
2. The $210,000 in selling and administrative expense consists of $75,000 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: