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roblem Set: Module 6 Income Statements under Absorption Costing and Variable Costing 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 (9,000 units) $1,350,000 Production costs (12,000 units) : Direct materials $666,000 Direct labor 319,200 Variable factory overhead 159,600 Fixed factory overhead 106,800 1,251,600 Selling and administrative expenses: Variable selling and administrative expenses $194,000 Fixed selling and administrative expenses 75,100 269,100 If required, round interim per-unit calculations to the nearest cent. a. Prepare an income statement according to the absorption costing concept. Gallatin County Motors Inc. Absorption Costing Income Statement For the Month Ended July 31 Sales Cost of goods sold Gross profit Selling and administrative expenses Operating income 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. 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 Check My Work Submit Assignment for Grading Assignment Score: 90.97% All Email Instructor Save and Exit