Solution-Prepare an income statement according to variable

Prepare an income statement according to variable costing

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Reference no: EM133165198

Question - Income Statements under Absorption Costing and Variable Costing - Gallatin County Motors Inc. assembles and sells snowmobile engines. The company began operations on July 1 and operated at 100% of capacity during the first month. The following data summarize the results for July:

Sales (11,500 units)		$1,840,000
Production costs (15,000 units):
Direct materials	$888,000
Direct labor	426,000
Variable factory overhead	213,000
Fixed factory overhead	142,500	1,669,500
Selling and administrative expenses:
Variable selling and administrative expenses	$258,800
Fixed selling and administrative expenses	100,200	359,000

If required, round interim per-unit calculations to the nearest cent.

a. Prepare an income statement according to the absorption costing concept.

b. Prepare an income statement according to the variable costing concept.

Reference no: EM133165198

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Prepare an income statement according to variable costing

Reference no: EM133165198

Reference no: EM133165198

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