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Module 6 Assignment eBook Show Me How Calculator Print Item 1. TMM.6-1 Income Statements under Absorption and Variable Costing Shawnee Motors Inc. assembles and sells MP3 players. The company began operations on August 1 and operated at 100% of capacity during the first month. The following data 2. EX.06-02.ALGO summarize the results for August: 3. EX.06-12.BLANKSHEET.AL... Sales (14,500 units) $1,885,000 Production costs (19,000 units): Direct materials $913,900 Direct labor 438,900 Variable factory overhead 218,500 Fixed factory overhead 146,300 1,717,600 Selling and administrative expenses: Variable selling and administrative expenses $266,200 Fixed selling and administrative expenses 103,100 369,300 If required, round interim per-unit calculations to the nearest cent. a. Prepare an income statement according to the absorption costing concept. Shawnee Motors Inc. Absorption Costing Income Statement For the Month Ended August 31 Sales $ 1,885,000 Cost of goods sold Progress: 2/3 items Check My Work Previous NextModule 6 Assignment eBook Show Me How Calculator Print Item Cost of goods sold v TMM.6-1 EX.06-02.ALGO EX.06-12.BLANKSHEET.AL... Feedback Check My Work a. Under absorption costing, the cost of goods manufactured includes direct materials, direct labor, and factory overhead costs. Both fixed and variable factory costs are included as part of factory overhead. Learning Objective 1. b. Prepare an income statement according to the variable costing concept. Shawnee Motors Inc. Variable Costing Income Statement For the Month Ended August 31 Fixed mosts. Progress: 2/3 items Check My Work Previous NextModule 6 Assignment eBook Show Me How Calculator Print Item 1. TMM.6-1 Fixed costs: 2. EX.06-02.ALGO 3. EX.06-12.BLANKSHEET.AL... Feedback Check My Work b. Under variable costing, the cost of goods manufactured includes only variable manufacturing costs. Learning Objective 1. c. What is the reason for the difference in the amount of income from operations reported in (a) and (b)? Under the method, the fixed manufacturing cost included in the cost of goods sold is matched with the revenues. Under , all of the fixed manufacturing cost is deducted in the period in which it is incurred, regardless of the amount of inventory change. Thus, when inventory increases, the income statement will have a higher income from operations than will the variable costing income statement. Feedback Check My Work Incorrect Progress: 2/3 items Check My Work Previous Next>