Income Statements under Absorption and Variable Costing Shawnee Motors Inc. assembles and sells MP3 players. 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: Sales (8,000 units) $720,000

roduction costs (10,000 units):
Direct materials		$333,000
Direct labor		160,000
Variable factory overhead		80,000
Fixed factory overhead		53,000		626,000
Selling and administrative expenses:
Variable selling and administrative expenses		$97,000
Fixed selling and administrative expenses		37,600		134,600

If required, round interim per-unit calculations to the nearest cent.

a. Prepare an income statement according to the absorption costing concept.

Shawnee Motors Inc.
Absorption Costing Income Statement
For the Month Ended August 31
	$
	$
	$

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

Shawnee Motors Inc.

Variable Costing Income Statement

For the Month Ended August 31

Shawnee Motors Inc.
Variable Costing Income Statement
For the Month Ended August 31
		$
		$
		$
Fixed costs:
	$
		$