Gallatin County Motors Inc. assembles and sells 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 July:

Sales (8,500 units)				$935,000
Production costs (11,000 units):
Direct materials		$447,700
Direct labor		214,500
Variable factory overhead		107,800
Fixed factory overhead		71,500		841,500
Selling and administrative expenses:
Variable selling and administrative expenses		$130,400
Fixed selling and administrative expenses		50,500		180,900

If required, round interim per-unit calculations to the nearest cent.

Question Content Area

a. Prepare an income statement according to the absorption costing concept.

b. Prepare an income statement according to the variable costing concept.