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 (15,500 units)		$1,705,000
Production costs (20,000 units):
Direct materials	$814,000
Direct labor	390,000
Variable factory overhead	196,000
Fixed factory overhead	130,000		1,530,000
Selling and administrative expenses:
Variable selling and administrative expenses	$237,200
Fixed selling and administrative expenses	91,800		329,000

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.