Absorption and Variable Costing Income Statements for Two Months and Analysis During the first month of operations ended July 31, Head Gear Inc. manufactured 33,900 hats, of which 32,200 were sold. Operating data for the month are summarized as follows: Sales $296,240 Manufacturing costs: Direct materials $176,280 Direct labor 47,460 Variable manufacturing cost 20,340 Fixed manufacturing cost 20,340 264,420 Selling and administrative expenses: Variable $16,100 Fixced 11.750 27,850 During August. Head Gear Inc. manufactured 30,500 hats and sold 32.200 hats. Operating data for August are summanized as follows Sales $296.240 Manufacturing costs: Direct materials s158.600 Direct labor 42.700 Variable manufacturing cost 18.300 20,340 239,940 Foced manufacturing cost

FINANCIAL ACCOUNTING
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Chapter1: Financial Statements And Business Decisions
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Absorption and Variable Costing Income Statements for Two Months and Analysis
During the first month of operations ended July 31, Head Gear Inc. manufactured 33,900 hats, of which 32,200 vwere sold. Operating data for the month are summarized as follows:
Sales
$296,240
Manufacturing costs:
Direct materials
$176,280
Direct labor
47,460
Variable manufacturing cost
20,340
Fixed manufacturing cost
20,340
264/420
Selling and administrative expenses:
Variable
$16,100
Fixed
11,750
27,850
During August Head Gear Inc, manufectured 30,500 hats and sold 32,200 hats. Operating data for August are summarized as folovsi
Sales
$296,240
Manufacturing costs:
Direct materials
$158,600
Direct labor
42.700
Variable manufacturing cost
18,300
20,340
239,940
Fixed manufacturing cost
Selling and administrative expenses:
$16.100
Variable
11.750
27 850
Fixed
Required:
Transcribed Image Text:Absorption and Variable Costing Income Statements for Two Months and Analysis During the first month of operations ended July 31, Head Gear Inc. manufactured 33,900 hats, of which 32,200 vwere sold. Operating data for the month are summarized as follows: Sales $296,240 Manufacturing costs: Direct materials $176,280 Direct labor 47,460 Variable manufacturing cost 20,340 Fixed manufacturing cost 20,340 264/420 Selling and administrative expenses: Variable $16,100 Fixed 11,750 27,850 During August Head Gear Inc, manufectured 30,500 hats and sold 32,200 hats. Operating data for August are summarized as folovsi Sales $296,240 Manufacturing costs: Direct materials $158,600 Direct labor 42.700 Variable manufacturing cost 18,300 20,340 239,940 Fixed manufacturing cost Selling and administrative expenses: $16.100 Variable 11.750 27 850 Fixed Required:
2b. Prepare income statement for August using the variable costing concept.
Head Gear Inc.
Variable Costing Income Statement
For the Month Ended August 31
Sales
296,240 V
Variable cost of goods sold:
Inventory, August 1
12,240
Variable cost of goods manufactured
244,080 X
Total variable cost of goods sold
Manufacturing margin
Variable selling and administrative expenses
Contribution margin
Fixed costs
Fixed manufacturing costs
20.340
Fixed selling and administrative.expenses
11.750
Total fixed costs
32.090
Operating income
Lin
Transcribed Image Text:2b. Prepare income statement for August using the variable costing concept. Head Gear Inc. Variable Costing Income Statement For the Month Ended August 31 Sales 296,240 V Variable cost of goods sold: Inventory, August 1 12,240 Variable cost of goods manufactured 244,080 X Total variable cost of goods sold Manufacturing margin Variable selling and administrative expenses Contribution margin Fixed costs Fixed manufacturing costs 20.340 Fixed selling and administrative.expenses 11.750 Total fixed costs 32.090 Operating income Lin
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