During the first month of operations ended July 31, YoSan Inc. manufactured 2,400 flat panel televisions, of which 2,000 were sold. Operating data for the month are summarized as follows:

Sales		$2,150,000
Manufacturing costs:
Direct materials	$960,000
Direct labor	420,000
Variable manufacturing cost	156,000
Fixed manufacturing cost	288,000	1,824,000
Selling and administrative expenses:
Variable	$204,000
Fixed	96,000	300,000

Required:

1. Prepare an income statement based on the absorption costing concept.

• Cost of goods manufactured
• Fixed manufacturing costs
• Fixed selling and administrative expenses
• Inventory, July 31
• Total cost of goods sold

YoSan Inc.
Absorption Costing Income Statement
For the Month Ended July 31
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Cost of goods sold:
	$fill in the blank c618f90f404bfd3_4
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		$fill in the blank c618f90f404bfd3_10
		fill in the blank c618f90f404bfd3_12
		$fill in the blank c618f90f404bfd3_14

2. Prepare an income statement based on the variable costing concept.

• Cost of goods sold
• Cost of goods manufactured
• Manufacturing margin
• Variable cost of goods manufactured
• Variable selling and administrative expenses

YoSan Inc.
Variable Costing Income Statement
For the Month Ended July 31
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Variable cost of goods sold:
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		$fill in the blank b5c526f91fac055_10
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		$fill in the blank b5c526f91fac055_14
Fixed costs:
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		$fill in the blank b5c526f91fac055_22

3. Explain the reason for the difference in the amount of operating income reported in (1) and (2).

The operating income reported under___absorption/variable___ costing exceeds the operating income reported under ___absorption/variable___ costing, due to ___fixed/variable___ manufacturing costs that are deferred to a future month under__absorption/variable___ costing.