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 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,x $20) Cost of goods sold Gross margin Selling and administrative expenses Net income 2,000,eee 2,000,000 4ee, Bee 1,600,000 1,600,000 630,000 $ 970,000 Additional Information a. Selling and administrative expenses consist of $450,000 in annual fixed expenses and $2.25 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 (5700,000 / 100,000 units) $4 per unit $6 per unit $3 per unit $7 per unit Required: Required: 1. Prepare an income statement for the company under variable costing. TREZ Company Variable Costing Income Statement Net income (loss)