please answer all requirements complete and correct with working please answer in text thanks 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 duringthe first month. The following data summarize the results for July:Sales (10,000 units)Production costs (13,000 units):Direct materialsDirect laborVariable factory overheadFixed factory overheadSelling and administrative expenses:Variable selling and administrative expensesFixed selling and administrative expenses)$529,100253,500127,40084,500$154,10059,700If required, round interim per-unit calculations to the nearest cent.$1,100,000994,500213,800 a. Prepare an income statement according to the absorption costing concept.Gallatin County Motors Inc.Absorption Costing IncomeStatementFor the Month Ended July 31b. Prepare an income statement according to the variable costing concept.Gallatin County Motors Inc.Variable Costing Income StatementFor the Month Ended July 31Fixed 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. Under, all of the fixed manufacturing cost is deducted in the period in which it is incurred, regardless of the amount of inventorychange. Thus, when inventory increases, theincome statement will have a higher operating income.

The variable costing income statement is a way of preparing an income statement that includes only…

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 (10,000 units) Production costs (13,000 units): Direct materials Direct labor Variable factory overhead Fixed factory overhead Selling and administrative expenses: Variable selling and administrative expenses Fixed selling and administrative expenses $529,100 253,500 127,400 84,500 $154,100 59,700 If required, round interim per-unit calculations to the nearest cent. $1,100,000 994,500 213,800

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 (10,000 units) Production costs (13,000 units): Direct materials Direct labor Variable factory overhead Fixed factory overhead Selling and administrative expenses: Variable selling and administrative expenses Fixed selling and administrative expenses $529,100 253,500 127,400 84,500 $154,100 59,700 If required, round interim per-unit calculations to the nearest cent. $1,100,000 994,500 213,800

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter7: Variable Costing For Management analysis

Section: Chapter Questions

Problem 2E: Gallatin County Motors Inc. assembles and sells snowmobile engines. The company began operations on...

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