Absorption and Variable Costing Income Statements

During the first month of operations ended July 31, YoSan Inc. manufactured 8,800 flat panel televisions, of which 8,200 were sold. Operating data for the month are summarized as follows:

Sales		$1,148,000
Manufacturing costs:
Direct materials	$580,800
Direct labor	176,000
Variable manufacturing cost	149,600
Fixed manufacturing cost	70,400	976,800
Selling and administrative expenses:
Variable	$90,200
Fixed	41,500	131,700

Required:

1. Prepare an income statement based on the absorption costing concept.

YoSan Inc.
Absorption Costing Income Statement
For the Month Ended July 31
Sales		$___________
Cost of goods sold:
Cost of goods manufactured	$___________
Inventory, July 31	$___________
Total cost of goods sold		$___________
Gross profit		$___________
Selling and administrative expenses		$___________
Income from operations		$___________

2. Prepare an income statement based on the variable costing concept.

YoSan Inc.
Variable Costing Income Statement
For the Month Ended July 31
Sales		$___________
Variable cost of goods sold:
Variable cost of goods manufactured	$___________
Inventory, July 31	$___________
Total variable cost of goods sold		$___________
Manufacturing margin		$___________
Variable selling and administrative expenses		$___________
Contribution margin		$___________
Fixed costs:
Fixed manufacturing costs	$___________
Fixed selling and administrative expenses	$___________
Total fixed costs		$___________
Income from operations		$___________

3. The income from operations reported under ____ costing exceeds the income from operations reported under _____ costing by the difference between the two, due to ____ manufacturing costs that are deferred to a future month under ____ costing.