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 (8,500 units) Production costs (11,000 units): Direct materials Direct labor Variable factory overhead Fixed factory overhead $765,000 $366,300 176,000 88,000 58,300 688,600 Selling and administrative expenses: Variable selling and administrative expenses $106,700 Fixed selling and administrative expenses 41,300 148,000 If required, round interim per-unit calculations to the nearest cent. a. Prepare an income statement according to the absorption costing concept. Sales Gallatin County Motors Inc. Absorption Costing Income Statement For the Month Ended July 31 Cost of goods sold Gross profit Gross profit Selling and administrative expenses Operating income Feedback Check My Work 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