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 (16,000 units)				$1,920,000
Production costs (21,000 units):
Direct materials		$932,400
Direct labor		447,300
Variable factory overhead		224,700
Fixed factory overhead		149,100		1,753,500
Selling and administrative expenses:
Variable selling and administrative expenses		$271,800
Fixed selling and administrative expenses		105,200		377,000

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
Sales	$fill in the blank
Cost of goods sold	fill in the blank
Gross profit	$fill in the blank
Selling and administrative expenses	fill in the blank
Income from operations	$fill in the blank