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 data summarize the results for August:

Sales $(19,000$ units$)$ $$2,660,000$

Production costs $(25,000$ units$)$:

Direct materials $$1,295,000$

Direct labor $622,500$

Variable factory overhead $310,000$

Fixed factory overhead $207,5002,435,000$

Selling and administrative expenses:

Variable selling and administrative expenses $$377,400$

Fixed selling and administrative expenses $146,100523,500$

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

Question Content Area

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

Shawnee Motors Inc.

Absorption Costing Income Statement

For the Month Ended August $31$

$$-$ Select $-$

$-$ Select $-$

$$-$ Select $-$

$-$ Select $-$

$$-$ Select $-$

Question Content Area

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

Shawnee Motors Inc.

Variable Costing Income Statement

For the Month Ended August $31$

$$-$ Select $-$

$-$ Select $-$

$$-$ Select $-$

$-$ Select $-$

$$-$ Select $-$

Fixed costs:

$$-$ Select $-$

$-$ Select $-$

$-$ Select $-$

$$-$ Select $-$