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 $50 per unit) Cost of goods sold Gross profit Selling and administrative expenses Income \begin{tabular}{r} $4,000,000 \\ 2,400,000 \\ \hline 1,600,000 \\ 560,000 \\ \hline$1,040,000 \\ \hline \hline \end{tabular} Additional Information a. Selling and administrative expenses consist of $400,000 in annual fixed expenses and $2 per unit in variable selling and administrative expenses. b. The company's product cost of $30 per unit consists of the following. Direct materials Direct labor Variable overhead Fixed overhead (\$800,000/100,000 units) $4 per unit $15 per unit $3 per unit $8 per unit Required: Prepare an income statement for the company under variable costing. \begin{tabular}{|l|r|r|} \hline \multicolumn{2}{|c|}{ TREZ Company } \\ \hline \multicolumn{2}{|c|}{ Income Statement (Variable Costing) } \\ \hline Sales & & $4,000,000 \\ \hline Less: Variable expenses & & \\ \hline Variable cost of goods sold & 1,200,000 & \\ \hline Variable selling and administrative expenses & 240,000 & \\ \hline Contribution margin & & 1,920,000 \\ \hline Less: Fixed expenses & & \\ \hline Fixed overhead & & \\ \hline Fixed selling and administrative costs & & \\ \hline & & $880,000 \\ \hline Income \end{tabular} PIU's: Cost gooas sola Plus: Fixed expenses Plus: Variable expenses Less: Cost of goods sold Less: Fixed expenses Less: Variable expenses Sales Less: Variable expenses Plus: Fixed expenses Plus: Variable expenses Less: Cost of goods sold Less: Fixed expenses Less: Variable expenses Cost of goods sold Fixed overhead Fixed selling and administrative costs Sales Variable cost of goods sold Variable sellina and administrative expenses