Income Statements under Absorption and Variable Costing

Beach Motors Inc. assembles and sells Dune Buggy engines. The company began operations on July 1, 2014, and operated at 100% of capacity during the first month. The following data summarize the results for July:

Sales (30,000 units) Production costs (40,500 units): Direct materials Direct labor............................... Variable factory overhead Fixed factory overhead Selling and administrative expenses: Variable selling and administrative expenses Fixed selling and administrative expenses $9,000,000 $4,495,500 2,187,000 1,093,500 729,000 8,505,000 $1,260,000 225,000 1,485,000