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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

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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, Sales (80,000 units x 540 per unit) Cost of goods sold Beginning inventory Cost of goods manufactured (1ee, eee units x $20 per unit) Cost of good available for sale Ending inventory (20,000 x $20) Cost of goods sold Gross margin Selling and administrative expenses Net income 2, eee, eee 2, eee, see 4ee, eee 1,6ee, eee 1,6ee, eee 510, eee $1,099, eae 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 ($600,000 / 100,000 units) $4 per unit $7 per unit $3 per unit $6 per unit Required: 1. Prepare an income statement for the company under variable costing. TREZ Company Variable Costing Income Statement

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