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Income Statements under Absorption Costing and Vartable Costing Gallatin County Motors Inc. assembles and sells...

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Income Statements under Absorption Costing and Vartable Costing Gallatin County Motors Inc. assembles and sells snowmobile engines. The company began operations on July 1 and operated at 100% of capacty during the first month The following data summarize the results for July: If required, round interim per-unit calculations to the nearest cent. a. Prepare an Income statement according to the absorption costing concept. c. What is the reason for the difference in the amount of operating income reported in (a) and (b)? Under the method, the foxed manufacturing cost included in the cost of goods sold is matched with the revenues. Under of the foxed manufacturing cost is deducted in the period in which is is incurred, regardless of the ameuns of inventory change, Thus, when inventory increases, the income statement will have a higher operating income. 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

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