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$)$ $$2,170,000$

Production costs $(20,000$ units$)$:

Direct materials $$1,036,000$

Direct labor $498,000$

Variable factory overhead $248,000$

Fixed factory overhead $166,0001,948,000$

Selling and administrative expenses:

Variable selling and administrative expenses $$301,900$

Fixed selling and administrative expenses $116,900418,800$

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.

Gallatin County Motors Inc.

Variable Costing Income Statement

For the Month Ended July $31$