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.Exercise $19-4$ Variable costing income statement LO P$2$

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)$

Cost of goods sold $(825$$$500)$

Gross margin

Selling and administrative expenses

Net income

Additional Information

a$.$ Product cost per kayak totals $$500,$ which consists of $$400$ in variable production cost and $$100$ in fixed production cost$-$the latter

amount is based on $$107,500$ of fixed production costs allocated to the $1,075$ kayaks produced.

b$.$ The $$210,000$ in selling and administrative expense consists of $$85,000$ that is variable and $$125,000$ that is fixed.

Required:

Prepare an income statement for the current year under variable costing.

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Required $1$

Prepare an income statement for the current year under variable costing.

KENZI KAYAKING

Variable Costing Income Statement