Required : Prepare income statements for August & September using Marginal and absorption costing.

Vcosts per unit: Direct materials -$14, Direct labour -$20, Variable manufacturing overhead -$10, selling and administrative -$ 6

Fixed cost per month

Fixed manufacturing overhead -$315,00.00

Fixed selling and administrative overheads - $245,000.00

The product sells for $120 per unit. Production and sales data for July, August, and September, the first three months of operations, are shown below:

Units Produced Units Sold

July 18,000 14,500

August 16,000 15,700

September 20,000 21,600