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Trez Company began operations this year. During this first year, the company produced 100,000 units and sold 80,000 units. The absorption costing income statement for this year follows. $3,200,000 $ 0 Sales (80,000 units * $40 per unit) Cost of goods sold Beginning inventory Coat of goods manufactured (100,000 units x $20 per unit) Coat of goods available for sale Ending inventory 20,000 * $20) Cost of goods sold Gross margin Selling and administrative expenses Net income 2,000,000 2,000,000 400,000 1,600,000 1,600,000 540,000 $1,060,000 Additional Information a. Selling and administrative expenses consist of $400,000 in annual fixed expenses and $1.75 per unit in variable selling and administrative expenses. b. The company's product cost of $20 per unit is computed as follows. Direct materials $5 Der unst Direct labor $per unit $2 Der unit Variable overhead Fixed overhead ($900,000 / 100,000 units) $9 Der unit Required: 1. Prepare an income statement for the company under variable costing. 2. Fill in the blanks. Complete this question by entering your answers in the tabs below. Required Required 1 2 Prepare an income statement for the company under variable costing. TREZ Company Variable Costing Income Statement Sales $ 3.200 3.200.000 Less: Variable costs Direct materials 400,000 Direct labor 320.000 Variable overhead 160,000 Total variable costs Contribution margin 850,000 2.320.000 Net income (loss) Required Required 2 >