Income Statements under Absorption Costing and Variable Costing Gallatin County Motors Inc. assembles 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 (12,000 units) Production costs (15,000 units): $1,560,000 Direct materials Direct labor Variable factory overhead Fixed factory overhead $721,500 346,500 172,500 115,500 1,356,000 Selling and administrative expenses: Variable selling and administrative expenses $210,200 Fixed selling and administrative expenses 81,400 291,600 If required, round 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 1,560,000