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Prepare an income statement according to variable costing

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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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