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) $ 794,375 Cost of goods sold (775 * $ 475) 368, 125 Gross margin 426, 250 Selling and administrative expenses 210,000 Net income $216,250 Additional Information a. Product 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 $102,500 of fixed production costs allocated to the 1,025 kayaks produced. b. 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: 1 Complete this question by entering your answers in the tabs below. Show less A Required Required 2 Prepare an income statement for the current year under variable costing. Show less KENZI KAYAKING Variable Costing Income Statement Net income (loss) 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 * $ 475) Gross margin Selling and administrative expenses Net income $ 794,375 368,125 426,250 210,000 $216, 250 Additional Information a. Product 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 $102,500 of fixed production costs allocated to the 1,025 kayaks produced. b. 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: Complete this question by entering your answers in the tabs below. Show less A Required Required 1 2 Fill in the blanks: The dollar difference in variable costing income and absorption costing income = units fixed overhead per unit. Hayek Bikes prepares the income statement under variable costing for its managerial reports, and it prepares the income statement under absorption costing for external reporting. For its first month of operations, 375 bikes were produced and 225 were sold; this left 150 bikes in ending inventory. The income statement information under variable costing follows. $388,125 135,000 12,375 Sales (225 x $1,725) Variable product cost (225 x $600) Variable selling and administrative expenses (225 x $55) Contribution margin Fixed overhead cost Fixed selling and administrative expense Net income 240,750 63,750 90,000 $ 87,000 1. Prepare this company's income statement for its first month of operations under absorption costing. 2. Fill in the blanks: Complete this question by entering your answers in the tabs below. Required Required 1 2 Fill in the blanks: The dollar difference in variable costing income and absorption costing income = units fixed overhead per unit. 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 * $ 475) Gross margin Selling and administrative expenses Net income $ 794,375 368,125 426,250 210,000 $216, 250 Additional Information a. Product 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 $102,500 of fixed production costs allocated to the 1,025 kayaks produced. b. 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: Complete this question by entering your answers in the tabs below. Show less A Required Required 1 2 Fill in the blanks: The dollar difference in variable costing income and absorption costing income = units fixed overhead per unit. Hayek Bikes prepares the income statement under variable costing for its managerial reports, and it prepares the income statement under absorption costing for external reporting. For its first month of operations, 375 bikes were produced and 225 were sold; this left 150 bikes in ending inventory. The income statement information under variable costing follows. $388,125 135,000 12,375 Sales (225 x $1,725) Variable product cost (225 x $600) Variable selling and administrative expenses (225 x $55) Contribution margin Fixed overhead cost Fixed selling and administrative expense Net income 240,750 63,750 90,000 $ 87,000 1. Prepare this company's income statement for its first month of operations under absorption costing. 2. Fill in the blanks: Complete this question by entering your answers in the tabs below. Required Required 1 2 Fill in the blanks: The dollar difference in variable costing income and absorption costing income = units fixed overhead per unit.