Absorption and Variable Costing Income Statements for Two Months and AnalysisDuring the first month of operations ended July 31, Head Gear Inc. manufactured 25,400 hats, of which 23,600 were sold. Operating data for the month are summarized as follows:Sales$179,360Manufacturing costs:Direct materials$109,220Direct labor27,940Variable manufacturing cost12,700Fixed manufacturing cost12,700162,560Selling and administrative expenses:Variable$9,440Fixed6,89016,330During August, Head Gear Inc. manufactured 21,800 hats and sold 23,600 hats. Operating data for August are summarized as follows:Sales$179,360Manufacturing costs:Direct materials$93,740Direct labor23,980Variable manufacturing cost10,900Fixed manufacturing cost12,700141,320Selling and administrative expenses:Variable$9,440Fixed6,89016,330Required:1a. Prepare income statement for July using the absorption costing concept.Head Gear Inc.Absorption Costing Income StatementFor the Month Ended July 31SalesCost of goods sold:Cost of goods manufacturedInventory, July 31Total cost of goods soldGross profitSelling and administrative expensesOperating income ib. Prepare income statement for August using the absorption costing concept.Head Gear Inc.Absorption Costing Income StatementFor the Month Ended August 31SalesCost of goods sold:Inventory, August 1Cost of goods manufacturedTotal cost of goods soldGross profitSelling and administrative expensesOperating incomeFeedback2a. Prepare income statement for July using the variable costing concept.Head Gear Inc.Variable Costing Income StatementFor the Month Ended July 31SalesVariable cost of goods sold:Variable cost of goods manufacturedInventory, July 31Total variable cost of goods soldManufacturing marginVariable selling and administrative expensesContribution marginFixed costs:Fixed manufacturing costsFixed selling and administrative expensesTotal fixed costsOperating income

Name: Absorption and Variable Costing Income Statements for Two Months and
Uploaded: 2024-03-20T06:32:49.000Z
Channel: Bartleby
Description: Absorption and Variable Costing Income Statements for Two Months and AnalysisDuring the first month of operations ended July 31, Head Gear Inc. manufactured 25,400 hats, of which 23,600 were sold. Operating data for the month are summarized as follo