Only need explanation and answers for portion b.

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: $2,600,000 Sales (4,000 units) Production costs (4,350 units): Direct materials $1,218,000 Direct labor 522,000 Variable factory overhead 87,000 130,500 1,957,500 Fixed factory overhead Selling and administrative expenses: $60,000 Variable selling and administrative expenses Fixed selling and administrative expenses 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 Sales 2,600,000 Cost of goods sold 1,800,000 Gross profit 800,000 Selling and administrative expenses 85,000 Operating income 715,000 Check My Work Previous Nex 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 $ 2,600,000 Variable cost of goods sold 1,740,000 X Manufacturing margin $ 860,000 x Variable selling and administrative expenses 155,500 x Contribution margin 704,500 x Fixed costs: Fixed factory overhead costs Fixed selling and administrative expenses Total fixed costs ol Operating income Feedback