Kenzi Kayaking, a manufacturer of kayaks, began operations this year. During this first year, the company produced 1,025 kayaks and sold 775 at a price of $1,025 each. At this first year-end, the company reported the following income statement information using absorption costing. Sales (775 * $1,025) Cost of goods sold (775 * $450) Gross margin Selling and administrative expenses Net income $ 794,375 348,750 445,625 230,000 $ 215, 625 Additional Information a. Product cost per kayak totals $450, which consists of $350 in variable production cost and $100 in fixed production costthe latter amount is based on $102,500 of fixed production costs allocated to the 1,025 kayaks produced. b. The $230,000 in selling and administrative expense consists of $95,000 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: KENZI KAYAKING Variable Costing Income Statement Sales 794,375 Less: Variable costs $ 271,250 Variable product costs Variable selling and administrative expenses 95,000 Total variable costs 366,250 428,125 Contribution margin Less: Fixed expenses Fixed overhead costs 102,500 135,000 Fixed selling and administrative costs Total fixed expenses 237,500 Net income (loss) 190,625 Net income under absorption costing is higher than net income under variable costing by: $ 128,750 Number of units added to(subtracted from) inventory Fixed costs added to inventory Fill in the blanks: The dollar difference in variable costing income and absorption costing income = units fixed overhead per unit