structions id. Operating data for the month are summarized as follows: 1 Sales $789,750.00 2 Manufacturing costs Direct materials 3 $395,825.00 4 Direct labor 117,075.00 5 Variable manufacturing cost 6 Fixed manufacturing cost 7 Selling and administrative expenses 61325.00 55,750,00 629,975.00 3 Variable $26,325.00 26,325.00 9 Fixed 52,650.00 During August, Western Creations produced 49,550 designer cowboy hats and sold 52,650 Cowboy hats. Operating data for August are Summarized as follows During August, Western Creations produced 49,550 designer cowboy hats and sold 52,650 cowboy hats. Operating data for August are summarized as follows: 1 Sales $789,750.00 $351,805.00 104,055.00 4 Manufacturing costs 3. Direct materials Direct labor Variable manufacturing cost Fixed manufacturing cost Selling and administrative expenses 5 54,505.00 55,750.00 566,115.00 Variable 526,325.00 26,325.00 Fixed 52650.00 Required: 1. Using the absorption costing concept prepare income statements for (a) July and (b) August 2. Using the variable costing concept, prepare Income statements for (a) July and (b) August." 3a. Explain the reason for the differences in the amount of income from operations in (1) and (2) for July 36. Explain the reason for the differences in the amount of income from operations in (1) and (2) for August 4. Based on your answers to (1) and (2), did Western Creations Company operate more profitably in July or in August? Explain *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 required. Enter Inventory, July 31 as a negative number using a minus sign. If a net loss is incurred, enter that amount as a negative number using a minus sign tructions Labels and Amount Descriptions Labels August 31 Cost of goods sold Fixed costs For the Month Ended August 31 W For the Month Ended July 31 July 31 Variable cost of goods sold Amount Descriptions Contribution margin Contribution margin ratio Refer to the life alohale and Amanin annum Amount Descriptions Contribution margin Contribution margin ratio Cost of goods manufactured Fixed manufacturing costs w Fixed selling and administrative expenses Gross profit Income from operations Inventory, August 1 Inventory, July 31 Loss from operations Inventory, July 31 Loss from operations Manufacturing margin Planned contribution margin Sales M Sales mix Selling and administrative expenses Total cost of goods sold Wy Total fixed costs ar Total variable cost of goods sold bn. Variable cost of goods manufactured bns Instructions Labels and Amount Descriptions ! Absorption Costing Income Statement-July Absorption Costing Income Statement-August Variable Costing Income Statement-July Variable Costing Income Statement-August ! Final Questions