Shawnee Motors Inc. assembles and sells snowmobile engines. 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:
Instructions Shawnee Motors Inc. assembles and sells snowmobile engines. 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 9,500,000.00 1 Sales (38,000 units) 2Production costs (44,000 units) 3Direct materials Direct labor Variable factory overhead Fixed factory overhead $4,400,000.00 1,760,000.00 ,100,000.00 660,00000 7920,00000 7,920,000.00 7Selling and administrative expenses Variable selling and administrative expenses 1,170,000.00 Fixed selling and administrative expenses 00,000.001,370,000.00 Required a. Prepare an income statement according to the absorption costing concept. b. Prepare an income statement according to the variable costing concept. c. What is the reason for the difference in the amount of income from operations reported in (a) and (b)? Refer to the lists of Labels and Amount Descriptions for the exact wording of the answer choices for text entries. Be sure to complete the statement heading. A colon (:) will automatically appear if it is required. Enter all amounts as positive numbers. Labels and Amount Descriptions bel Fixed costs For the Month Ended August 31 August 31 Amount Descriptions Contribution margin Contribution margin ratio Cost of goods sold Fixed factory overhead costs Fixed selling and administrative expenses Gross profit Income from operations Loss from operations Manufacturing margin Planned contribution margin Sales Sales mix Selling and administrative expenses Total fixed costs Variable cost of goods sold Variable selling and administrative expenses Ab sorption Costing Income Statement a. Prepare an income statement according to the absorption costing concept. Refer to the lists of Labels and Amount Descriptions for the exact wording of the answer choices for text entries. Be sure to complete the statement heading. A colon (:) will automatically appear if it is required. Enter all amounts as positive numbers. Shawnee Motors Inc. Absorption Costing Income Statement Label) Variable Costing Income Statement b. Prepare an income statement according to the variable costing concept. Refer to the lists of Labels and Amount Descriptions for the exact wording of the answer choices for text entries. Be sure to complete the statement heading. A colon() will automatically appear if it is required. Enter all amounts as positive numbers. Shawnee Motors Inc. Variable Costing Income Statement Label) s (Label) 10
