Sales $(17,500$ units$)$

$$1,750,000$

Production costs $(23,000$ units$)$:

If required, round interim per$-$unit calculations to the nearest cent.

a$.$ Prepare an income statement according to the absorption costing concept.

Gallatin County Motors Inc.

Absorption Costing Income

Statement

$.$ For the Month Ended July $31$

$

$\frac{?}{\text{b}\text{a}\text{r}}()$

b$.$ Prepare an income statement according to the variable costing concept.

Gallatin County Motors Inc.

Variable Costing Income Statement

For the Month Ended July $31$

Fixed costs:

$

$3$

c$.$ What is the reason for the difference in the amount of operating income reported in $($a$)$ and $($b$)?$