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value: 8.00 points Problem 19-2A Variable costing income statement and conversion to absorption costing income LO P2, P3 Trez Company began operations this year. During

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value: 8.00 points Problem 19-2A 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. Sales (80,000 unitsx $45 per unit) Cost of goods sold 3,600,000 Beginning inventory Cost of goods manufactured (100,000 units x $25 per unit) 2,500,000 Cost of good available for sale Ending inventory (20,000 x $25) 2,500,000 500,000 Cost of goods sold 2,000,000 Gross margin Selling and administrative expenses 1,600,000 560,000 Net income $ 1,040,000 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 $25 per unit is computed as follows Direct materials Direct labor Variable overhead Fixed overhead ($900,000/ 100,000 units) $ $ $ 3 per unit 9 per unit 4 per unit 9 per unit

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