Income Statements under Absorption Costing and Variable CostingGallatin County Motors Inc. assembles and sells snowmobile engines. The company began operations on July 1 andoperated at 100% of capacity during the first month. The following data summarize the results for July:Sales (4,000 units)$2,600,000Production costs (4,350 units):Direct materialsDirect laborVariable factory overheadFixed factory overheadSelling and administrative expenses:Variable selling and administrative expensesFixed selling and administrative expensesSalesa. Prepare an income statement according to the absorption costing concept.Gallatin County Motors Inc.Absorption Costing Income StatementFor the Month Ended July 31$2,600,000Cost of goods soldGross profit1,800,000$1,218,000522,00087,000130,500 1,957,500$800,000$60,00025,00085,000 Variable factory overheadOperating incomeb. Prepare an income statement according to the variable costing concept.Gallatin County Motors Inc.Variable Costing IncomeStatementSalesFor the Month Ended July 31$2,600,000Direct materialsFixed costs:SA60,000Is$715,000Is

As per the absorption costing method, the product cost includes fixed and variable manufacturing…

Income Statements under Absorption Costing and Variable Costing 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: $2,600,000 Sales (4,000 units) Production costs (4,350 units): Direct materials Direct labor Variable factory overhead Fixed factory overhead Selling and administrative expenses: Variable selling and administrative expenses Fixed selling and administrative expenses $1,218,000 522,000 87,000 130,500 1,957,500 $60,000 25,000 a. Prepare an income statement according to the absorption costing concept. Gallatin County Motors Inc. 85,000

Income Statements under Absorption Costing and Variable Costing 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: $2,600,000 Sales (4,000 units) Production costs (4,350 units): Direct materials Direct labor Variable factory overhead Fixed factory overhead Selling and administrative expenses: Variable selling and administrative expenses Fixed selling and administrative expenses $1,218,000 522,000 87,000 130,500 1,957,500 $60,000 25,000 a. Prepare an income statement according to the absorption costing concept. Gallatin County Motors Inc. 85,000

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter7: Variable Costing For Management analysis

Section: Chapter Questions

Problem 2E: Gallatin County Motors Inc. assembles and sells snowmobile engines. The company began operations on...

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