Trez Company began operations this year. During this year, the company produced 100,000 units and sold 80,000 units. The absorption costing income statement for this year follows. Income Statement (Absorption Costing) Sales (80,000 units x $45 per unit) Cost of goods sold Gross profit $ 3,600,000 2,000,000 1,600,000 490,000 Selling and administrative expenses Income $ 1,110,000 Additional Information a. Selling and administrative expenses consist of $350,000 in annual fixed expenses and $1.75 per unit in variable selling and administrative expenses. b. The company's product cost of $25 per unit consists of the following. Direct materials $ 4 per unit Direct labor $ 12 per unit Variable overhead $ 2 per unit $7 per unit Fixed overhead ($700,000/100,000 units) Required: Prepare an income statement for the company under variable costing. TREZ Company Income Statement (Variable Costing) Sales: Less: Variable expenses Variable cost of goods sold Variable selling and administrative expenses