Absorption and Variable Costing Income Statements for Two Months and Analysis During the first month of operations ended July 31, Head Gear Inc. manufactured 24,800 hats, of which 23,300 were sold. Operating data for the month are summarized as follows: Sales $149,120 Manufacturing costs: Direct materials Direct labor Variable manufacturing cost Fixed manufacturing cost Selling and administrative expenses: Variable Fixed Manufacturing costs: Direct materials Direct labor Variable manufacturing cost Fixed manufacturing cost Selling and administrative expenses: Variable Fixed Required: $89,280 24,800 9,920 9,920 4 $5,990 5,100 During August, Head Gear Inc. manufactured 21,800 hats and sold 23,300 hats. Operating data for August are summarized as follows: Sales $149,120 $78,480 21,800 8,720 9,920 133,920 $6,990 5,100 12,090 118,920 12,090 1a. Prepare income statement for July using the absorption costing concept. Head Gear Inc. Absorption Costing Income Statement For the Month Ended July 31

Abooption and Variable Cossing Income Statements for Two Months and Arhalytis During the first menth of operations ended July 31, Head cear the. manufactured 24, too hats, of which 23 , 300 were seld. Operating data for the morth are summariced as follons: Doring Aupust, Head Gear inc, manutactured 21,800 hats and sold 23,300 hats. Operating data for Avoust are summarized as follows: Sales $149,120 1a. Prepare income statement for July using the absorption costing concept: 16. Drepare income stalrment ler Aubyst uning she abserptiten costing concakt 2a. Frepare income statement for July using the variable costing cencebt 2b. Prepare income stalement for August uting the variable costirg concept 3a. For Lly, eperating inciome npertud under cesting is leck than couting dove be part al mathufacturing cost that are exfecnod a. conts. th. peices c. sales voluma. 1. "Lales volume"; "prices" and "reesti"-are eomect 1. None of thete thokices is correct. Thecerrect ansent is: Heat Gear inc, was ts the