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 (14,500 units) $1,450,000 Production costs (19,000 units): Direct materials $703,000 Direct labor 338,200 Variable factory overhead 169,100 Fixed factory overhead 112,100 1,322,400 Selling and administrative expenses: Variable selling and administrative expenses $205,000 Fixed selling and administrative expenses 79,300 284,300 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 Sales Cost of goods sold Gross profit Selling and administrative expenses Income from operations 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 Variable selling and administrative expenses Contribution margin Fixed costs: Fixed factory overhead Fixed selling and administrative expenses Total fixed costs Income from operations