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. $3,600,000 Sales (80,000 units X $45 per unit) Cost of goods sold Beginning inventory Cost of goods manufactured (100,000 units X $25 per unit) Cost of goods available for sale Ending inventory (20,000 x $25) Cost of goods sold Gross margin Selling and administrative expenses Net income 2,500,000 2,500,000 500,000 2,000,000 1,600,000 490,000 $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 is computed as follows. Direct materials Direct labor Variable overhead Fixed overhead ($800,000 / 100,000 units) $ 4 per unit $11 per unit $ 2 per unit $ 8 per unit Prepare an income statement for the company under variable costing. TREZ Company Variable Costing Income Statement Sales 3.600,000 Less: Variable costs Direct labor Direct materials Variable overhead Variable selling and administrative expenses 880,000 320,000 160,000 140,000 1,500,000 2,100,000 Total variable costs Contribution margin ess: Fixed expenses Fixed overhead Fixed selling and administrative costs 800,000 350,000 Total fixed expenses Net income (loss) 1,150,000 $ 950,000 & Answer is complete but not entirely correct. 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 = 45 units on fixed overhead per unit