Absorption and Variable Costing Income Statements for Two Months and Analysis During the first month of operations ended July 31, Head Gear Inc. manufactured 26,500 hats, of which 24,600 were sold Operating data for the month are urmare as follows: $201,720 Manufacturing costs Direct materials $124.550 Direct labor 31,800 Variable manufacturing cost 15.900 Fbond manufacturing cost 13,250 195,300 Selling and administrative expenses Variable Food $9.840 7,180 17,020 During august, Head Geanina Tautatud 2200 hats and sold 24,600 hts Operating data for August are summarized as follows: 5202.720 Manufacturing costs: Din materials $106,690 Dolabor 27.240 Variacturing cost 13.620 Fixed manufacturing cost 13,250 150.800 13,250 160,800 Fixed manufacturing cost Selling and administrative expenses: Variable Fixed $9,840 7,180 17,020 Required: 1a. Prepare income statement for July using the absorption costing concept. Head Gear Inc. Absorption Costing Income Statement For the Month Ended July 31 Sales Cost of goods sold: Cost of goods manufactured Inventory, July 31 Total cost of goods sold Gross profit Selling and administrative expenses Operating income Feedback 1b. Prepare Income statement for August using the absorption costing concept. Head Gear Inc. Absorption Costing Income Statement For the Month Ended August 31 Sales Cost of goods sold: Inventory, August 17 Cost of goods manufactured Total cost of goods sold Gross profit Selling and administrative expenses Operating income Fenoot 2a. Preoare income statement for July using the variable costing concept. Head Gear Inc. Variable Costing Inconie Statement 2a. Prepare income statement for July using the variable costing concept. Head Gear Inc. Variable Costing Income Statement For the Month Ended July 31 Sales Variable cost of goods sold: Variable cost of goods manufactured Inventory, July 31 Total variable cost of goods sold Manufacturing margin Variable selling and administrative expenses Contribution margin Fixed costs Fixed manufacturing costs Fixed selling and wdministrative expenses Total fixed costs Operating income 2b. Prepare income statement for August using the variable costing concept. Head Gear Inc. Variable Costing Income Statement For the Month Ended August 31 Sales Variable cost of goods sold: Inventory, August 1 Variable cost of goods manufactured Total variable cost of goods sold Manufacturing margin > Variable selling and administrative expenses Contribution margin 5 Fixed costs Fixed manufacturing costs Fixed selling and administrative expenses Total fixed costs Operating income Also an alte costing Income Statements for Two Months and Analysis were sold Operating data for the month are summarized as follows: During the first month of operation ended July 31 Head Gear the manufactured 16 500 hits 5201,720 Manufactu conto Direct materials $121.550 31,600 15,900 mancing test 13,250 15 500 Dengan ditepe $9.540 7.100 17,00 Dune Bar the matte 2.700 and wald 14.00 Opening data care are follow $201.720 1100690 Dced labe 122 160.00 13,250 160,800 Fixed manufacturing cost Selling and administrative expenses: Variable $9,840 Fixed 7,180 17,020 Required: 1a. Prepare income statement for July using the absorption costing concept. Head Gear Inc Absorption Costing Income Statement For the Month Ended July 31 Sales Cost of goods sold: Cost of goods manufactured V Inventory, July 31 Total cost of goods sold Gross profit Selling and administrative expenses Operating income Total cost of goods sold Gross profit Selling and administrative expenses Operating income Feedback 1b. Prepare Income statement for August using the absorption costing concept, Head Gear Inc. Absorption Costing Income Statement For the Month Ended August 31 Sales y Cost of goods sold; Inventory, August 17 Cost of goods manufactured Total cost of goods sold Gross profit Selling and administrative expenses Operating income 2a. Prepare income statement for July using the variable costing concept. Head Gear Inc. Variable Costing Income Statement For the Month Ended July 31 Sales Variable cost of goods sold: Variable cost of goods manufactured Inventory, July 31 Total variable cost of goods sold Manufacturing margin Variable selling and administrative expenses contribution margin $ Fixed costs Fixed manufacturing costs Fixed selling and administrative expenses Total fixed costs V Operating income Fixed selling and administrative expenses Total fixed costs Operating income Feedback 2b. Prepare income statement for August using the variable costing concept. Head Gear Inc. Variable Costing Income Statement For the Month Ended August 31 Sales Variable cost of goods sold: Inventory, August 1 Variable cost of goods manufactured Total variable cost of goods sold Manufacturing margin Variable selling and administrative expenses Contribution margin ved costs Manufacturing margin Variable selling and administrative expenses Contribution margin Fixed costs: Fixed manufacturing costs 000 00 Fixed selling and administrative expenses Total fixed costs Operating income
