Absorption and Variable Costing Income Statements for Two Months and Analysis 3a. For July, operating income reported under costing is less than costing due to part of manufacturing costs that are expensed a. costs. b. prices. c. sales volume. d. "sales volume", "prices" and "costs" are correct. e. None of these choices is correct. The correct answer is: 4. Based on your answers to (1) and (2), did Head Gear Inc. operate more profitably in July or in August? Explain. Head Gear Inc. was under the variable costing concept. The difference in operating income reported under the absorption costing concept is due to allocating to the 1a. Prepare income statement for July using the absorption costing concept. Fectbsck Check. My Wibck "(Manufactured Units - Sold units) x (total manufacturing costs/manufactured units) 1b. Prepare income statement for August using the absorption costing concept