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: $1,280,000 Sales (8,000 units) Production costs (10,000 units): Direct materials $592,000 Direct labor 284,000 142,000 Variable factory overhead Fixed factory overhead 95,000 1,113,000 Selling and administrative expenses: Variable selling and administrative expenses Fixed selling and administrative expenses $172,500 66,800 239,300 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 $ 1,280,000 Cost of goods sold 890,400 Gross profit 389,600 Selling and administrative expenses 239,300 Income from operations 150,300 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