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lotion the month. were temporariy suspende operations if the aloe vera hand ovember? hat advice should the controlier to PR 20-3B anagement? and Absurptior, and variable costing income statements for two months oBJ, 1, 2 analysis During the first month of operations ended July 2016, Head Gear Inc. manufactured 6,400 hats, of which 5,200 were Operating data for the month are summarized as follows: Manufacturing costs: $104,000 Direct materials Direct labor $47,360 Variable manufacturing cost Fixed manufacturing cost 12,160 Selling and administrative expenses: 15,360 97,280 Variable $10,920 Fixed 5,200 16,120 ing During August Head Gear Inc. manufactured 4,000 hats and sold 5,200 hats. operat- data for August are summarized as follows Sales $104,000 Manufacturing costs: Direct materials. $29,600 Direct labor 14,000 Variable manufacturing cost Fixed manufacturing cost 15,360 Selling and administrative expenses: $10,920 Variable 5,200 16,120 Fixed Instructions prepare income statements for cao and 1. Using the absorption costing concept, July (b) August statements for July and a) Au 2. Using the variable costing prepare income in the amount of income from a. Explain the reason for the differences operations in Cl) and (2) for July from b. Explain the for the differences in the amount of income operations in (1) and (2) for August more Based on your answers to a) and (2), did Head Gear Inc. operate profitably in July or August? Explain. in 4. report and analysis OBJ., 4 PR 20-4B to sell and distribute its product throughout the state. Data Pachec Inc. employs seven the year ended June 30 are as follows: ed from the salespersons during Variable

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