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Kenzi Kayaking, a manufacturer of kayaks, began operations this year. During this first year, the company produced 1,100 kayaks and sold 850 at a price of $1,100 each. At this first year-end, the company reported the following income statement information using absorption costing. Sales (850 x $1,100) Cost of goods sold (850 * $475) Gross margin Selling and administrative expenses Net income $ 935,000 403,750 531,250 240,000 $ 291,250 Additional Information a. Product cost per kayak totals $475, which consists of $375 in variable production cost and $100 in fixed production cost-the latter amount is based on $110,000 of fixed production costs allocated to the 1,100 kayaks produced. b. The $240,000 in selling and administrative expense consists of $85,000 that is variable and $155,000 that is fixed. Required: 1. Prepare an income statement for the current year under variable costing. 2. Fill in the blanks: Complete this question by entering your answers in the tabs below. Required 1 Required 2 Prepare an income statement for the current year under variable costing. KENZI KAYAKING Variable Costing Income Statement Net income (loss) Kenzi Kayaking, a manufacturer of kayaks, began operations this year. During this first year, the company produced 1,100 kayaks and sold 850 at a price of $1,100 each. At this first year-end, the company reported the following income statement information using absorption costing. Sales (850 x $1,100) Cost of goods sold (850 x $475) Gross margin Selling and administrative expenses Net income $ 935,000 403,750 531,250 240,000 $ 291,250 Additional Information a. Product cost per kayak totals $475, which consists of $375 in variable production cost and $100 in fixed production cost-the latter amount is based on $110,000 of fixed production costs allocated to the 1,100 kayaks produced. b. The $240,000 in selling and administrative expense consists of $85,000 that is variable and $155,000 that is fixed. Required: 1. Prepare an income statement for the current year under variable costing. 2. Fill in the blanks: 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 X fixed overhead per unit.

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