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 $425) Gross margin Selling and administrative expenses Net income 886, 875 350, 625 536,250 260,000 276, 250 $ Additional Information a. Product cost per kayak totals $425, which consists of $325 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. b. The $260,000 in selling and administrative expense consists of $105,000 that is variable and $155,000 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) Required 1 Required 2 Fill in the blanks: The dollar difference in variable costing income and absorption costing income = units fixed overhead per unit