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 (16,500 units) $2,475,000 Production costs (21,000 units): Direct materials $1,165,500 Direct labor 558,600 Variable factory overhead 279,300 Fixed factory overhead 186,900 2,190,300 Selling and administrative expenses: Variable selling and administrative expenses $339,500 Fixed selling and administrative expenses 131,400 470,900 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 $Sales 2,475,000 Cost of goods sold Cost of goods sold Gross profit $Gross profit Selling and administrative expenses Selling and administrative expenses Operating income $Operating income 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 Sales $Sales Variable cost of goods sold Variable cost of goods sold Manufacturing margin $Manufacturing margin Variable selling and administrative expenses Variable selling and administrative expenses Contribution margin $Contribution margin Fixed costs: Fixed factory overhead costs $Fixed factory overhead costs Fixed selling and administrative expenses Fixed selling and administrative expenses Total fixed costs Total fixed costs Operating income $Operating income