Income statements under absorption 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 $(3,000$ units$)$ $$1,680,000$

Production costs $(3,000$ units$)$:

Direct materials $$722,400$

Direct labor $310,500$

Variable factory overhead $50,700$

Fixed factory overhead $79,5001,163,100$

Selling and administrative expenses:

Variable selling and administrative expenses $$36,100$

Fixed selling and administrative expenses $15,10051,200$

This information has been collected in the Microsoft Excel Online file. Open the spreadsheet, perform the required analysis, and input your answers in the questions below.a$.$ Prepare an income statement according to the absorption costing concept.

Gallatin County Motors Inc.

Absorption Costing Income Statement

For the Month Ended July $31$

b$.$ Prepare an income statement according to the variable costing concept.

Gallatin County Motors Inc.

Variable Costing Income Statement

For the Month Ended July $31$