Prepare an income statement according to the variable costing concept.

Gallatin County Motors Inc.

Variable Costing Income Statement

For the Month Ended July $31$

Sales

$Sales

$2,040,000$

Variable cost of goods sold

Variable cost of goods sold

$1,298,800$

Manufacturing margin

$Manufacturing margin

$741,200$

Variable selling and administrative expenses

Variable selling and administrative expenses

$284,700$

Contribution margin

$Contribution margin

$456,500$

Fixed costs:

Fixed factory overhead costs

$Fixed factory overhead costs

$156,200$

Fixed selling and administrative expenses

Fixed selling and administrative expenses

$110,200$

Total fixed costs

Total fixed costs

$266,400$

Operating income

$Operating income