Income Statements under Absorption and Variable Coating Shawnee Waters Inc. assembles and sells MP3 players. The company began aparations on August 1 and operated at 100% of capacity during the first month. The following data summarize the results far August $2,850,000 Sales (19,000 units) Production costs (25,000 units): Direct materials $1,367,500 Direct labor 665,000 Variable factory overhead 332,500 Fixed factory overhead 222,500 Selling and administrative expenses: Variable selling and administrative expenses $404,200 Fixed selling and administrative expenses 156,500 2,607,500 560,700 If required, round interim per-unit calculations to the nearest sent, 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 Cost of goods sold Gross profit Selling and administrative expenses Income from operations 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. Presare an income statement according to the variable casting conceat. Shawnee Motors Inc. Variable Costing Income Statement For the Month Ended August 31 Sales Variable cost of goods sold Manufacturing margin Variable selling and administrative expenses Contribution margin Find casts: Fixed factory overhead Fixed selling and administrative expenses Total fixed costs Income from operations