Variable costing income statement lo p2 kenzi kayaking, a manufacturer of kayaks, began operations this year. during this first year, the company produced 1,050 kayaks and sold 800. at a price of $1,050 each. at this first year-end, the company reported the following income statement information using absorption costing.
sales $84
cost of goods sold $4
gross margin 44
selling and administrative expenses 23
net income $21
additional information
product cost per kayak totals $500, which consists of $400 in variable production cost and $100 in fixed production cost—the latter amount is based on $105,000 of fixed production costs allocated to the 1,050 kayaks produced.
the $230,000 in selling and administrative expense consists of $75,000 that is variable and $155,000 that is fixed.
required
1. prepare an income statement for the current year under variable costing.