During the first month of operations ended July 31, YoSan Inc. manufactured 2,400 flat panel televisions, of which 2,000 were sold. Operating data for the month are summarized as follows:

Sales		$2,150,000
Manufacturing costs:
Direct materials	$960,000
Direct labor	420,000
Variable manufacturing cost	156,000
Fixed manufacturing cost	288,000	1,824,000
Selling and administrative expenses:
Variable	$204,000
Fixed	96,000	300,000

Required:

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

YoSan Inc.
Absorption Costing Income Statement
For the Month Ended July 31
		$
Cost of goods sold:
	$
		$
		$

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

YoSan Inc.
Variable Costing Income Statement
For the Month Ended July 31, 2016
		$
Variable cost of goods sold:
	$
		$
		$
Fixed costs:
	$
		$

3. Explain the reason for the difference in the amount of income from operations reported in (1) and (2).

Answer rating: 100% (QA)

YoSan Inc Absorption Costing Income Statement for the Month Ended July 31 Sales 2150000 Cost of goods sold Direct materials 960000 Direct labor 420000 ... View the full answer