2

televisions of which 2.000 were sold. Operating data for the month are summarized as follow Absorption and Variable Casting Income Statements During the first month of operations ended July 31, YoSan Inc, manufactured 2.400 Sales $2,150,000 Manufacturing costs Direct materials $960,000 Direct labor 420.000 Variable manufacturing cost 156.000 Fred manufacturing cost 288,000 1,824,000 Selling and administrative expenses Variable $204.000 Fooed 96,000 300.000 Required: 1. Prepare an income statement based on the absorption costing concept Yorban Inc. Absorption Costing Income Statement For the Month Ended July 31 Cost of goods sold 2. Prepare an income statement based on the variable costing concept Yasan Inc. Variable Costing Income Statement For the Month Ended July 31, 2016 Variable cost of goods solde DOUJOL 3. Explain the reason for the difference in the amount of income from operation reported in (1) and (2) The income from operations reported under costing exceeds the income from operations reported under two, due to manufacturing costs that are deferred to a future month under costing by the difference between the