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. $4,000,000 0 Sales (80,000 units x $50 per unit) Cost of goods sold Beginning inventory Cost of goods manufactured (100,000 units X $30 per unit) Cost of goods available for sale Ending inventory (20,000 * $30) Cost of goods sold Gross margin Selling and administrative expenses Net income 3,000,000 3,000,000 600,000 2,400,000 1,600,000 580,000 $1,020,000 Additional Information a. Selling and administrative expenses consist of $400,000 in annual fixed expenses and $2.25 per unit in variable selling and administrative expenses. b. The company's product cost of $30 per unit is computed as follows. Direct materials Direct labor Variable overhead Fixed overhead ($700,000 / 100,000 units) $ 4 per unit $15 per unit $ 4 per unit $ 7 per 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 1 Required 2 Prepare an income statement for the company under variable costing. TREZ Company Variable Costing Income Statement $ 4,000,000 Sales Less: Variable costs Net income (loss) Required 1 Required 2 > Complete this question by entering your answers in the tabs below. Required 1 Required 2 Fill in the blanks. The dollar difference in variable costing income and absorption costing income = units fixed overhead per unit.