On July 31, the end of the first month of operations, Covelli Equipment Company prepared the following income statement, based on the variable costing concept:

Prepare an income statement under absorptioncosting.

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Covell Equipment Company Variable Costing Income Statement For the Month Ended July 31, 2014 6,750,000 Variable cost of goods sold: $3,240,000 540,000 2700000 $4,050,000 1710000 2,340,000 Variable selling and administrative expenses........................ Fixed costs: 675000 Fixed selling and administrative expenses..................540,000 ,215,000 $1,125,000