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 COM Sales (80,000 units * $40 per unit) Cost of goods sold Beginning inventory Cost of goods manufactured (100,000 units * $20 per unit) Cost of good available for sale Ending inventory (20,000 $20) Cost of goods sold Gross margin Selling and administrative expenses Net Income $ 0 2,000,000 2,000,000 400,000 1.600.000 1,600,000 510.000 $1,090,000 mrences Additional Information a. Selling and administrative expenses consist of $350,000 in annual fixed expenses and $2 per unit in variable selling and administrative expenses. b. The company's product cost of $20 per unit is computed as follows. Direct materials Direct labor Variable overhead Fixed overhead (5800,000 / 100,000 unita) $4 per unit $5 per unit 53 per unit SB per unit Required: 1. Prepare an income statement for the company under variable costing. TREZ Company Variable Costing Income Statement Sales $ 3,200,000 ces Variable overhead Direct materials Direct labor Fixed overhead Variable selling and administrative expenses Plus: Variable costs Contribution margin Fixed overhead Fixed selling and administrative costs Variable overhead Net income (loss)