Carmen Beverages reports the following information for July:

Units produced and sold . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18,800

Per unit revenue and costs:

Sales revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $3.20

Direct materials costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.20

Direct labor costs. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.16

Variable manufacturing overhead . . . . . . . . . . . . . . . . . . . . . 0.06

Fixed manufacturing overhead based

on a volume of 18,800 units. . . . . . . . . . . . . . . . . . . . . . . . 0.92

Variable marketing and administrative costs . . . . . . . . . . . . . 0.48

Fixed marketing and administrative costs

based on a volume of 18,800 units . . . . . . . . . . . . . . . . . . 1.00

Required

Prepare:

a. A gross margin income statement.

b. A contribution margin income statement.