Income Statements under Absorption and Variable Costing

Shawnee Motors Inc. assembles and sells MP$3$ players. The company began operations on August $1$ and operated at $100\%$ of capacity during the first month. The following summarize the results for August:

Sales units$)$

$$2,170,000$

Production costs 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

$$1,036,000$

$498,000$

$248,000$

$166,000,1,948,000$

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 $31$

$\backslash$table$[[$For the Month Ended August $31],[$Cost of qoods sold$],[$Gross profit$],[$Selling and administrative expenses$]]$