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 (18,000 units)				$1,800,000
Production costs (23,000 units):
Direct materials		$851,000
Direct labor		409,400
Variable factory overhead		204,700
Fixed factory overhead		135,700		1,600,800
Selling and administrative expenses:
Variable selling and administrative expenses		$248,100
Fixed selling and administrative expenses		96,000		344,100

If required, round interim per-unit calculations to the nearest cent.

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
		$fill in the blank 53c039f51f9d016_2
		fill in the blank 53c039f51f9d016_4
		$fill in the blank 53c039f51f9d016_6
		fill in the blank 53c039f51f9d016_8
		$fill in the blank 53c039f51f9d016_10
Fixed costs:
	$fill in the blank 53c039f51f9d016_12
	fill in the blank 53c039f51f9d016_14
		fill in the blank 53c039f51f9d016_16
		$fill in the blank 53c039f51f9d016_18

Feedback

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
		$fill in the blank 53c039f51f9d016_2
		fill in the blank 53c039f51f9d016_4
		$fill in the blank 53c039f51f9d016_6
		fill in the blank 53c039f51f9d016_8
		$fill in the blank 53c039f51f9d016_10
Fixed costs:
	$fill in the blank 53c039f51f9d016_12
	fill in the blank 53c039f51f9d016_14
		fill in the blank 53c039f51f9d016_16
		$fill in the blank 53c039f51f9d016_18