During the first month of operations ended July 31, YoSan Inc. manufactured 9,300 flat panel televisions, of which 8,600 were sold. Operating data for the month are summarized as follows:

Sales		$1,419,000
Manufacturing costs:
Direct materials	$725,400
Direct labor	213,900
Variable manufacturing cost	186,000
Fixed manufacturing cost	93,000	1,218,300
Selling and administrative expenses:
Variable	$111,800
Fixed	51,400	163,200

Required:

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

Sales
Cost of goods sold:
Cost of goods manufactured
Inventory, July 32
Total cost of goods sold
Gross profit
Selling and administrative expenses
Income from operations

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

Variable cost of goods sold:
Variable cost of goods manufactured
Inventory 31 July
Total variable cost of good sold
Manufacturing margin
Variable selling and administrative expenses
Contribution Margin
Fixed costs:
Fixed manufacturing costs
Fixed selling administrative expenses
Total fixed costs
Income or Loss

3. The income from operations reported under

absorption/variable

costing exceeds the income from operations reported under

absorption/variable

costing by the difference between the two, due to

fixed/variable

manufacturing costs that are deferred to a future month under

absorption/variable

costing.