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 x $1,075) Cost of goods sold (825 x $475) $ 886,875 391,875 Gross margin Selling and administrative expenses 495,000 240,000 Net income $255,000 Additional Information a. Production cost per kayak totals $475, which consists of $375 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 $240,000 in selling and administrative expense consists of $95,000 that is variable and $145,000 that is fixed