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: $3,000,000 Sales (20,000 units) Production costs (26,000 units): Direct materials Direct labor $1,443,000 691,600 345,800 231,400 Variable factory overhead Fixed factory overhead 2,711,800 Selling and administrative expenses: Variable selling and administrative expenses $420,300 Fixed selling and administrative expenses 162,700 583,000 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 $ 3,000,000 Cost of goods sold Gross profit Selling and administrative expenses 583,000 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