Chapter 20 Homework Income statements under absorption costing and variable costing Instructions Labels and Amount Descriptions Shawnee Motors Inc. assembles and sells snowmobile engines. The company began operations on August 1 and operated at 100% of capacity during the first month. The following data summarize the results for August $8,250,000.00 Sales (33,000 units) Production costs (40,500 units): Direct materials 4 Direct labor 3,240,000.00 1,822,50000 1,012,500.00 Variable factory overhead Fixed factory overhead Seling and administrative expenses Variable selling and administrative expenses Fixed selling and administrative expenses 07,500.00 6,682,500.00 1,160,000.00 30,000.00 1390,000.00 Required: a. Prepare an income statement according to the absorption costing concept b. Prepare an income statement according to the variable costing concept" c. What is the reason for the diference in the amount of income from operations reported in (a) and (b)? Refer to the lists of Labels and Amount Descriptions for the exact wording of the answer choices for text entries. Be sure to complete the statement heading. A colon () wW automatically appear if it is required. Enter all amounts as positive numbers. Chapter 20 Homework absorption costing variable costing Instructions Labels and Amount Descriptions Labels Fixed costs For the Month Ended August 31 August 31 Amount Descriptions Contribution margin Contribution margin ratio Cost of goods sold Fixed factory overhead costs Fioxed selling and administrative expenses Gross profit Income from operations Loss from operations Manufacturing margin Planned contribution margin Sales Sales mix Selling and administrative expenses Total fixed costs Variable cost of goods sold Variable selling and administrative expenses Chapter 20 Homework Show Me How E Print Ihem Income statements under absorption costing and variable costing Instructions Labels and Amount Absorption Costing Income Statement Final Question What is the reason for the ditlerence in the amount of income from operations reported in (a) and (b)? Check all mat appy O There is no diflerenoe:the income from operations reported in (a) and (by is the same Under absorption costing, when inventory increases, the income statement wil hai e a higher income from operations than wil the variable costing income statement. OUnder variable costing the units that were produced but unsold include fixed factory overhead cost, which is not included in oost of goods sold O Under absorption costing. when inventory increases, the income statement will have a lower income from operations than will the variable costing income statement O Under variable costing, all of the fixed tactory overhead cost is deducted in the period in which it is incurred, egardless of the amount of inventory change Chapter 20 Homework Show Me How Cakulator -:Print Item Income statements under absorption costing and variable costing Descriptions Absorption Costing Income Statement Variable Costing Income Statement Final Question b Prepare an income statement accordling to me variable costing concept Refer to the ists of Labels and Amount Descnipions for me exact wording of the answer choices for text entries. Be sureo complete the statement heading A colon () will automaticaly appear if it is required. Enter all amounts as postive numbers Shawnee Motors Inc Variable Costing Inoome Statement Labe
