XYZ Co. has just completed its first year of operations. The company's accountant has prepared an absorption costing income statement for the year: Sales (25,000 units at $70 per unit)_ $1,750,000 Cost of goods sold Beginning inventory $0 Cost of goods manufactured (35,000 units at $30 per unit) 1,050,000 Cost of goods available for sale 1,050,000 Ending inventory (10,000 units at $30 per unit) 300,000 750,000 Gross margin 1,000,000 Selling and administrative expenses. 230,000 Net operating income (loss)_ $770,000 The company's selling and administrative expenses consist of $80,000 per year in fixed expenses and $6 per unit sold in variable expenses. The $30 per unit product cost given above is computed as follows: Direct materials 39 Direct labor 12 Variable manufacturing overhead 2 Fixed manufacturing overhead ($210,000 / 35,000 units) 6 Unit product cost $30 a) Redo the company's income statement in the contribution format using variable costing. Sales Variable expenses Variable costof goods sold_______ Variable selling and administrative expenses Contribution margin Fixed expenses Fixed manufacturing overhead Fixed selling and administrative expenses Net operating income (loss) Net operating income (loss): Variable _ Fixed manufacturing overhead deferred in inventory Net operating income (loss): Absorption