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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
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 (20,000 units) | $2,600,000 | ||||
Production costs (26,000 units): | |||||
Direct materials | $1,250,600 | ||||
Direct labor | 600,600 | ||||
Variable factory overhead | 299,000 | ||||
Fixed factory overhead | 200,200 | 2,350,400 | |||
Selling and administrative expenses: | |||||
Variable selling and administrative expenses | $364,300 | ||||
Fixed selling and administrative expenses | 141,000 | 505,300 |
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.
Cost of goods soldDirect laborDirect materialsFixed factory overhead costsSalesSales | $Sales |
Cost of goods soldGross profitSalesSelling and administrative expensesVariable factory overheadCost of goods sold | Cost of goods sold |
Direct laborDirect materialsGross profitFixed factory overhead costsSalesGross profit | $Gross profit |
Cost of goods soldFixed factory overhead costsSalesSelling and administrative expensesVariable factory overheadSelling and administrative expenses | Selling and administrative expenses |
Operating incomeLoss from operationsOperating income | $Operating income |
Question Content Area
b. Prepare an income statement according to the variable costing concept.
Contribution marginFixed selling and administrative expensesManufacturing marginSalesVariable selling and administrative expenses | $- Select - | |
Fixed factory overhead costsFixed selling and administrative expensesManufacturing marginVariable cost of goods soldVariable selling and administrative expenses | - Select - | |
Contribution marginManufacturing marginSalesVariable cost of goods soldVariable selling and administrative expenses | $- Select - | |
Fixed factory overhead costsFixed selling and administrative expensesManufacturing marginVariable cost of goods soldVariable selling and administrative expenses | - Select - | |
Contribution marginFixed selling and administrative expensesManufacturing marginSalesVariable selling and administrative expenses | $- Select - | |
Fixed costs: | ||
Contribution marginFixed factory overhead costsManufacturing marginSalesVariable cost of goods sold | $- Select - | |
Fixed selling and administrative expensesManufacturing marginSalesVariable cost of goods soldVariable selling and administrative expenses | - Select - | |
Contribution marginOperating incomeManufacturing marginSalesTotal fixed costs | - Select - | |
Operating incomeLoss from operations | $- Select - |
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