Absorption and Variable Costing income Statements for Two Months and Analysis buring the first month of operations ended July 31. Head Gear inc. manufactured 30,800 hats, of which 29,000 were sold. Operating data for the month are summanized as follows: During August, Head Gear Inc. manafoctured 27,200 hats and sold 29,000 hats. Operating data for August are summarized as follows: 13. Prepare income statement for July using the absorption costing concept. 1a. Prepare income statement for luly using the absorption costing 1b. Prepare income statement for August using the absorption costing con Head Gear Ine. 1b. Prepare income statement for August using the absorption costing conce 2a. Prepare income statement for July using the variable costing concept: 2a. Prepare income statement for July using the variable costing concept. 2b. Prepare income staterment for August using the vanlable costing concept. 2b. Prepare income statement for August using the variable costing cancept. 3a. For July, operating income reperted under manufacturing costs that are expented. 34. When large changes in invertory levels occur from ane period to the aext, it is po 3a. For July, operating income reported under [costing is less than manufacturing costs that are expensed. costing due to part of 3b. When large changes in inventory levels occur from one period to the next, it is possible for management to misinterpeet such increases (or decreases) in operating income as due to changes in: a. costs. b. arices. c. sales volume. d. "sales volume", "prices" and "costs" are correct. e. None of these cholces is correct. The correct answer is: 4. Bosed on your answers to (2) and (2), did Head Gear Inc. operate more profitably in July or in August? Eyplaint. Head Gear Inc, was allocating to the