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 (18,500 units)   $1,665,000   Production costs (24,000 units):     Direct materials $799,200     Direct labor 384,000     Variable factory overhead 192,000     Fixed factory overhead 127,200   1,502,400   Selling and administrative expenses:     Variable selling and administrative expenses $232,900     Fixed selling and administrative expenses 90,100   323,000   If required, round interim per-unit calculations to the nearest cent. a.  Prepare an income statement according to the absorption costing concept.

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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 (18,500 units)   $1,665,000  
Production costs (24,000 units):    
Direct materials $799,200    
Direct labor 384,000    
Variable factory overhead 192,000    
Fixed factory overhead 127,200   1,502,400  
Selling and administrative expenses:    
Variable selling and administrative expenses $232,900    
Fixed selling and administrative expenses 90,100   323,000  

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

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

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