Solution-Prepare an income statement according to variable

Prepare an income statement according to variable costing

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Reference no: EM133177906

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 (14,500 units)		$2,030,000
Production costs (19,000 units):
Direct materials	$984,200
Direct labor	473,100
Variable factory overhead	235,600
Fixed factory overhead	157,700	1,850,600
Selling and administrative expenses:
Variable selling and administrative expenses	$286,800
Fixed selling and administrative expenses	111,000	397,800

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

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 operating income reported in (a) and (b)?

Reference no: EM133177906

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Prepare an income statement according to variable costing

Reference no: EM133177906

Reference no: EM133177906

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