Income Statements under Absorption Costing and Variable Costing Crazy Mountain Sports Inc. assembles and sells snowmobile engines. The company began operations on March 1 and operated at 100% of capacity during the first month. The following data summarize the results for March: Sales (11,000 units) $1,210,000 Production costs (14,000 units): Direct materials Direct labor Variable factory overhead Fixed factory overhead $569,800 273,000 137,200 91,000 1,071,000 Selling and administrative expenses: Variable selling and administrative expenses $166,000 Fixed selling and administrative expenses 64,300 230,300 If required, round interim per-unit calculations to the nearest cent. a. Prepare an income statement according to the absorption costing concept. Crazy Mountain Sports Inc. Absorption Costing Income Statement For the Month Ended March 31 Line Item Description Sales Amount 1,210,000 Cost of goods sold Gross profit Selling and administrative expenses Operating income 286,000 X 230,300 Feedback Check My Work a. Under absorption costing, the cost of goods manufactured includes direct materials, direct labor, and factory overhead costs. Both fixed and variable factory costs are included as part of factory overhead. b. Prepare an income statement according to the variable costing concept. Crazy Mountain Sports Inc. Variable Costing Income Statement For the Month Ended March 31 Line Item Description Amount Amount Fixed costs: