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 (4,000 units) Production costs (4,350 units): Direct materials Direct labor $1,218,000. 522,000 $2,600,000 Variable factory overhead Fixed factory overhead 87,000 130,500 1,957,500 Selling and administrative expenses: Variable selling and administrative expenses Fixed selling and administrative expenses $60,000 25,000 85,000 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 $