Income Statements under Absorption and Variable Costing Shawnee Motors Inc. assembles and sells snowmobile engines. The company began operations on August 1 and operated at 100% of capacity during the first month. The following data summarize the results for August: $600,000 Sales (2,000 units) Production costs (2,400 units): Direct materials $300,000 Direct labor 115,200 43,200 Variable factory overhead Fixed factory overhead 21,600 480,000 Selling and administrative expenses: Variable selling and administrative expenses Fixed selling and administrative expenses $50,000 22,000 72,000 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 fle Direct materias $300,000 Direct labor 115,200 Variable factory overhead 43,200 21,600 480,000 Fixed factory overhead Selling and administrative expenses: Variable selling and administrative expenses Fixed selling and administrative expenses $50,000 22,000 72,000 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 7 Gross profit Selling and administrative expenses Income from operations to the variable costing concept b. Prepare an income statement according to the variable costing concept. Shawnee Motors Inc. Variable Costing Income Statement For the Month Ended August 31 Sales Variable cost of goods sold Manufacturing margin QOVOU Variable selling and administrative expenses Contribution margin Fixed costs: Fixed factory overhead Fixed selling and administrative expenses Total fixed costs Income from operations Feedback