Income Statements under Absorption Costing and Variable conting Gallatin County Motors Inc. assemblies and sells snowmobile engines. The company began operations on July 1 and operated at 100% of capacity during the first month. The following data summarize the results for July Sales (20,000 units) $2.400,000 Production costs (26,000 units) Direct materials $1,154,400 Direct labor 553,800 Variable factory overhead 278,200 Fored factory overhead 184,600 2.171,000 Selling and administrative expenses Variable selling and administrative expenses $336,500 Fixed selling and administrative expenses 230,300 466,800 It required around interim per unit calculations to the nearest cent. a. Prepare an income statement according to the absorption costing concept Gallatin County Motors Inc. Absorption Costing Income Statement For the Month Ended July 31 Sales Cost of goods sold Gross profit Selling and administrative expenses Operating income 3. Under tvsorption costing, the cost of goods manufactured includes direct materials, direct labor, and factory overhead costs. Both fixed and variable costs are included as part of factory overhead. b. Prepare an income statement according to the variable costing concept. Gallatin County Motors Inc. Variable Costing Income Statement For the Month Ended July 31 Sales Variable cost of goods sold Manufacturing margin Variable selling and administrative expenses Contribution margin Fixed costs: Fixed factory overhead costs Fixed selling and administrative expenses Total fixed costs Operating income Check My Won FIA