b. Prepare an income statement according to the variable costing concept.Gallatin County Motors Inc.Variable Costing Income StatementFor the Month Ended July 31$$Fixed costs:c. What is the reason for the difference in the amount of operating income reported in (a) and (b)?Under themethod, the fixed manufacturing cost included in the cost of goods sold is matched with the revenues. Underall of the fixed manufacturing cost is deducted in the period inwhich it is incurred, regardless of the amount of inventory change. Thus, when inventory increases, theincome statement will have a higher operating income. Income Statements under Absorption Costing and Variable CostingGallatin 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 (9,500 units)$1,330,000Production costs (12,000 units):Direct materials$621,600Direct labor298,800Variable factory overhead148,800Fixed factory overhead99,6001,168,800Selling and administrative expenses:Variable selling and administrative expenses$181,200Fixed selling and administrative expenses70,100251,300If required, round interim per-unit calculations to the nearest cent.a. Prepare an income statement according to the absorption costing concept.Gallatin County Motors Inc.Absorption Costing IncomeStatementFor the Month Ended July 31

Name: b. Prepare an income statement according to the variable costing conc
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Description: b. Prepare an income statement according to the variable costing concept.Gallatin County Motors Inc.Variable Costing Income StatementFor the Month Ended July 31$$Fixed costs:c. What is the reason for the difference in the amount of operating income

1. Computation of cost of goods sold under absorption costing systems. Production cost * sales unit…

Business

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. Prepare an income statement according to the variable costing concept. Gallatin County Motors Inc. Variable Costing Income Statement For the Month Ended July 31 Fixed costs: .What is the reason for the difference in the amount of operating income reported in (a) and (b)? nder the method, the fixed manufacturing cost included in the cost of goods sold is matched with the revenues. Under C all of the fixed manufacturing cost is deducted in the period in hich it is incurred, regardless of the amount of inventory change. Thus, when inventory increases, the income statement will have a higher operating income.

. Prepare an income statement according to the variable costing concept. Gallatin County Motors Inc. Variable Costing Income Statement For the Month Ended July 31 Fixed costs: .What is the reason for the difference in the amount of operating income reported in (a) and (b)? nder the method, the fixed manufacturing cost included in the cost of goods sold is matched with the revenues. Under C all of the fixed manufacturing cost is deducted in the period in hich it is incurred, regardless of the amount of inventory change. Thus, when inventory increases, the income statement will have a higher operating income.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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am. 132.