Whitman Company has just completed its first year of operations. The companys absorption costing income statement for the year appears below: Whitman Company Income Statement Sales (39,000 units $40.60 per unit) $ 1,583,400 Cost of goods sold (39,000 units $22 per unit) 858,000 Gross margin 725,400 Selling and administrative expenses 409,500 Net operating income $ 315,900 The companys selling and administrative expenses consist of $292,500 per year in fixed expenses and $3 per unit sold in variable expenses. The $22 per unit product cost given above is computed as follows: Direct materials $ 11 Direct labor 4 Variable manufacturing overhead 2 Fixed manufacturing overhead ($225,000 45,000 units) 5 Absorption costing unit product cost $ 22 Required: 1. Prepare the companys income statement in the contribution format using variable costing.