Absorption and Variable Costing Income Statements

During the first month of operations ended July 31, YoSan Inc. manufactured 10,700 flat panel televisions, of which 9,800 were sold. Operating data for the month are summarized as follows:

Absorption and Variable Costing Income Statements During the first month of operations ended July 31, YoSan Inc. manufactured 10,700 flat panel televisions, of which 9,800 were sold. Operating data for the month are summarized as follows: Sales Manufacturing costs: $1,519,000 Direct materials Direct labor Variable manufacturing cost Fixed manufacturing cost $781,100 235,400 203,300 96,300 1,316,100 Selling and administrative expenses: variable $117,600 54,100 Fixed 171,700 Required: 1. Prepare an income statement based on the absorption costing concept. YoSan 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. YoSan Inc. Variable Costing Income Statement For the Month Ended July 31 Variable cost of goods sold: Fixed costs: . Explain the reason for the difference in the amount of income from operations reported in (1) and (2) The income from operations reported under costing exceeds the income from operations reported under costing by the difference between the two, due to manufacturing costs that are deferred to a future month under costing