Trez Company began operations this year, producing 100,000 units while selling 80,000 units. Their absorption costing income statement follows. Selling and administrative expenses were $350,000 in fixed costs plus $1.75 per unit in variable expenses, while the $30 per unit product cost consisted of variable and fixed manufacturing expenses.

1. Trez Company began operations this year. During this year, the company produced 100,000
units and sold 80,000 units. The absorption costing income statement for this year follows.
Additional Information a. Selling and administrative expenses consist of $350,000 in annual
fixed expenses and $1.75 per unit in variable selling and administrative expenses. b. The
company's product cost of $30 per unit consists of the following. Required: Prepare an income
statement for the company under variable costing.