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Hayek Bikes prepares the income statement under variable costing for its managerial reports, and it prepares the income statement under absorption costing for external reporting. For its first month of operations, 375 bikes were produced and 225 were sold; this left 150 bikes in ending inventory. The income statement information under variable costing follows.

Sales (225 $1,625)	$	365,625
Variable product cost (225 $675)		151,875
Variable selling and administrative expenses (225 $60)		13,500
Contribution margin		200,250
Fixed overhead cost		71,250
Fixed selling and administrative expense		80,000
Net income	$	49,000

1. Prepare this company's income statement for its first month of operations under absorption costing. (Round your intermediate calculations to the nearest whole dollar.)

HAYEK BIKES Absorption Costing Income Statement Sales $365,625 Less: Cost of goods sold Variable product costs $151,875 Fixed overhead costs 42,750 Cost of goods sold 194,625 Gross margin 171,000 Selling general and administrative expenses Variable selling and administrative expenses 13,500 Fixed selling and administrative costs 80,000 Total selling general and administrative expenses 93,500 Net income (loss) $77,500 Net income under absorption costing is higher than net income under variable costing by: $28,500 Number of units added to(subtracted from) inventory Fixed costs added to inventory

*Please advise that under 'Number of units added (subtracted from inventory), there is another box where another amount is before getting the final answer to fixed costs added to inventory.

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