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Johnson Motors Inc. assembles and sells MP3 players. The company began operations on August 1 and operated at 100% of capacity during the first month.

Johnson Motors Inc. assembles and sells MP3 players. The company began operations on August 1 and operated at 100% of capacity during the first month. The following data summarize the results for August:

Sales (12,000 units)

$1,320,000

Production costs (15,000 units):

Direct materials

$610,500

Direct labor

292,500

Variable factory overhead

147,000

Fixed factory overhead

97,500

1,147,500

Selling and administrative expenses:

Variable selling and administrative expenses

$177,900

Fixed selling and administrative expenses

68,900

246,800

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

a. Prepare an income statement according to the absorption costing concept.

Johnson Motors Inc.

Absorption Costing Income Statement

For the Month Ended August 31

$

$

$

b. Prepare an income statement according to the variable costing concept.

Johnson Motors Inc.

Variable Costing Income Statement

For the Month Ended August 31

$

$

$

Fixed costs:

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