Reference no: EM132579542

Income Statements under Absorption and Variable Costing Shawnee Motors Inc. assembles and sells MP3 players. The company began operations on August 1 and operated at 100% of capacity during the first month. The following data summarize the results for August:

Sales (15,500 units) $1,550,000

Production costs (20,000 units):

Direct materials             $740,000

Direct labor                   356,000

Variable factory overhead 178,000

Fixed factory overhead   118,000

                               1,392,000

Selling and administrative expenses:

Variable selling and administrative expenses $215,800

Fixed selling and administrative expenses83,500 299,300

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

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