Trez Company began operations this year. During this year, the company produced $100,000$ units and sold $80,000$ units. The absorption costing income statement for this year follows.

Income Statement $($Absorption Costing$)$

Sales $(80,000$ units $\backslash$times $$40$ per unit$)$ $ $3,200,000$

Cost of goods sold $1,600,000$

Gross profit $1,600,000$

Selling and administrative expenses $560,000$

Income $ $1,040,000$

Additional Information

Selling and administrative expenses consist of $$400,000$ in annual fixed expenses and $$2$ per unit in variable selling and administrative expenses.

The company's product cost of $$20$ per unit consists of the following.

Direct materials $ $5$ per unit

Direct labor $ $3$ per unit

Variable overhead $ $4$ per unit

Fixed overhead $($$$800,000/100,000$ units$)$ $ $8$ per unit

Required:

Prepare an income statement for the company under variable costing.