1) Using the absorption costing concept, prepare income statements for (A) July and (B) August.

2) Using the variable costing concept, prepare income statements for (A) July and (B) August.

3) Explain the reason for the differences in the amount of income from operations in (1) and (2) for July. AND Explain the reason for the differences in the amount of income from operations in (1) and (2) for August.

4)Based on your answers to (1) and (2), did Western Creations Company operate more profitably in July or in August? Explain.

Absorption and variable costing income statements for two months and analysis Obj . 1 , 2 During the first month of operations ended July 31 , Western Creations Company produced 80, 000 designer cowboy hats , of which 72, 000 were sold . Operating data for the month are summarized as follows : LION LIF HSH Sales .. .` quarant``!` $4.3.20, 0 0``` Manufacturing costs :` Direct materialS ....... . and for^ ^ ^ $1.500,0 010 Direct label ......onmortgage gettdating^ 1, 4140.00 0 Variable manufacturing cost* . .. . 57^ 240.0 0 0 Fixed manufacturing cost ............ 320.0 0 0 Selling and administrative expenses :` Variable* ........... .` $ 141.040 Fixed . 25, 0.0 0 1.65,0 0 0 During August , Western Creations produced $4, 000 designer cowboy hats and sold 72, 000 cowboy hats . Operating data for August are summarized as follows :During August , Western Creations produced by, and designer cowboy hats and sold 72 0 0^ cowboy hats . Operating data for August are summarized as follows : $4. 320,00 0^ Manufacturing costs Direct material` .... . ! ! ! ! ! ! $1, 280,00 0 Direct labor* . ... . .. . 9 1 9^ ^ ^ ^ ^ ^ ^ ^ 1, 152.090 Variable manufacturing cost ... 192,000 Fixed manufacturing cost .........." 320, 0 0^ 2.344, 0 00 Selling and administrative expenses :` Variable .... . . " language_ _^ ^ ^ ^ ^ ^ ^ ^ ^ Fixed . ..... I'll^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ 25. 04010 165,050 Instructions 1 . Using the absorption costing concept , PIFPATE income statements for ( A ) July and ( B ) August . Answer$ Check Figure : Income from operations , 9847, 000IDTAP Q. Sea Costing for Management Analysis Instructions 1. Using the absorption costing concept, prepare income statements for (A) July and (B) August. Answer + Check Figure: Income from operations, $847,000 X 2. Using the variable costing concept, prepare income statements for (A) July and (B) August. 3. A. . - Explain the reason for the differences in the amount of income from operations in (1) and (2) for July. B. - Explain the reason for the differences in the amount of income from operations in (1) and (2) for August. Based on your answers to (1) and (2), did Western Creations Company operate more profitably in July or in August? Explain. PR 6-4A Salespersons' report and analysis search Et