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Problem 06-2A Variable costing income statement and conversion to absorption costing income LO P2, P3 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. $4,000,000 Sales (80,000 units X $50 per unit) Cost of goods sold Beginning inventory Cost of goods manufactured (100,000 units * $30 per unit) Cost of goods available for sale Ending inventory (20,000 $30) Cost of goods sold Gross margin Selling and administrative expenses Net income $ 0 3,000,000 3,000,000 600,000 2,400,000 1,600,000 530,000 $1,070,000 Additional Information a. Selling and administrative expenses consist of $350,000 in annual fixed expenses and $2.25 per unit in variable selling and administrative expenses. b. The company's product cost of $30 per unit is computed as follows. Direct materials Direct labor Variable overhead Fixed overhead ($900,000 / 100,000 units) $5 per unit $14 per unit $ 2 per unit $ 9 per unit TREZ Company Variable Costing Income Statement Net income (loss) Required 1 Required 2 > 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 = units fixed overhead per unit.