Reference no: EM133014612

Question - 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:

Sales (13,000 units) $1,170,000 Production costs (17,000 units): Direct materials $566,100 Direct labor 272,000 Variable factory overhead 136,000 Fixed factory overhead 90,100 1,064,200 Selling and administrative expenses: Variable selling and administrative expenses $165,000 Fixed selling and administrative expenses 63,900 228,900

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

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

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