Kenzl Kayaking, a manufacturer of kayaks, began operations this year. During this first year, the company produced 1,050 kayaks and sold 800 at a price of $1,050 each. At this first year-end, the company reported the following income statement Information using absorption costing. Sales (800 x $1,050) Cost of goods sold (800 * $475) Gross margin Selling and administrative expenses Net Income $ 840,000 380,000 460,000 210.000 $ 250,000 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 $105,000 of fixed production costs allocated to the 1050 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: Required 1 Required 2 Prepare an Income statement for the current year under variable costing. KENZI KAYAKING Variable Costing Income Statement Less: Variable costs Variable product costs Variable selling and administrative expenses 1 DU Total variable costs Contribution margin Less: Fixed expenses Fixed overhead costs Fixed selling and administrative 18 10 1 Net income (loss) Net income under absorption costing is higher than net income under variable costing by: Fixed costs added to inventory Prex 1 of 1 Next Required 1 Required 2 Fill in the blanks: The dollar difference in variable costing income and absorption costing income = und absorption costing income = (Required 1 units fixed overhead per unit units Required 2