Gallatin county motors inc assembles and sell snowmobile engines. The company began operations on July 1 and operated at 100% of capacity during the first month. The following data summarize the results for JulySales (19,500 units) $2,535,000 Production cost (25,000 units)Direct materials $1202,500Direct labor 577,500Variable factory overhead 287,500Fixed factory overhead. 192,500. 2,260.000Selling and administrative expenses Variable selling and administrative expenses $350,300Fixed selling and administrative expenses 135,600. 485,900

b. Prepare an income statement according to the variable costing concept. Gallatin County Motors Inc. Variable Costing Income Statement For the Month Ended July 31 Sales 2,535,000 Variable cost of goods sold v -154,400 X Manufacturing margin Variable selling and administrative expenses Contribution margin Fixed costs. Fixed factory overhead costs v Fixed selling and administrative expenses v Total fixed costs v Operating income v Feedback Check My Work b. Under variable costing, the cost of goods