Gallatin county motors inc. assembled 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: 1 Sales (32,000 units)$8,000,000.002 Production costs (41,000 units):Direct materials$3,280,000.0034Direct labor2,255,000.00Variable factory overhead1,025,000.006.Fixed factory overhead615,000.007,175,000.007 Selling and administrative expenses:Variable selling and administrative expenses$1,180,000.00Fixed selling and administrative expenses210,000.001,390,000.00 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)?* Be sure to complete the statement heading. Refer to the list of Labels and Amount Descriptions provided for the exact wording of the answerchoices for text entries. A colon () will automatically appear if it is required. Enter amounts as positive numbers unless the amount is acalculation that results in a negative amount. For example: Net loss should be negative. Expenses should be positive.

Under variable costing, fixed manufacturing overhead is considered as a period cost and deducted a…

Gallatin county motors inc. assembled 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:

Gallatin county motors inc. assembled 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:

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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