a. Prepare an income statement according to the absorption costing concept. Gallatin County Motors Inc. Absorption Costing Income Statement For the Month Ended July 31 Variable Costing Income Statement On April 30, the end of the first month of operations, Joplin Company prepared the following income statement, based on the absorption costing concept: Joplin Company Absorption Costing Income Statement For the Month Ended April 30 Sales (4,200 units) Cost of goods sold: Cost of goods manufactured (4,900 units) Inventory, April 30 (700 units) Total cost of goods sold Gross profit Selling and administrative expenses Operating income $138,600 $112,700 (16,100) If the fixed manufacturing costs were $28,175 and the fixed selling and administrative expenses were $12,070, prepare an income statement according to the variable costing concept. Round all final answers to whole dollars. Joplin Company Variable Costing Income Statement For the Month Ended April 30 Variable cost of goods sold: Fixed costs: a. Prepare a contribution margin by product report. Compute the contribution margin ratio for each product as a whole percent. Galaxy Sports Inc. Contribution Margin by Product b. What advice would you give to the management of Galaxy Sports Inc. regarding the profitability of the two products? The ? line provides the largest total contribution margin and the largest contribution margin ratio. If the sales mix were shifted more toward the .ine, the overall profitability of the company would increase. Product Profitability Analysis Galaxy Sports Inc. manufactures and sells two styles of All Terrain Vehicles (ATVs), the Conquistador and Hurricane, from a single manufacturing facility. The manufacturing facility operates at 100% of capacity. The following per-unit information is available for the two products: In addition, the following sales unit volume information for the period is as follows: b. Prepare an income statement according to the variable costing concept. Gallatin County Motors Inc. Variable Costing Income Statement For the Month Ended July 31 c. What is the reason for the difference in the amount of operating income reported in (a) and (b)? Under the method, the fixed manufacturing cost included in the cost of goods sold is matched with the revenues. Under! of the fixed manufacturing cost is deducted in the period in which it is incurred, regardless of the amount of inventory change. Thus, when inventory increases, the income statement will have a higher operating income. 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 (10,500 units) Production costs (14,000 units): Direct materials Direct labor Variable factory overhead Fixed factory overhead Selling and administrative expenses: Variable selling and administrative expenses Fixed selling and administrative expenses $945,000 $135,80052,600188,400 If required, round interim per-unit calculations to the nearest cent