absorption income statement

Ned's Entrees produces frozen meals, which it sells for $9 each. The company uses the FIFO inventory costing method, and it computes a new monthly fixed manufacturing overhead rate based on the actual number of meals produced that month. All costs and production levels are exactly as planned. The following data are from Ned's Entrees's first two months in business: (Click the icon to view the data.) Requirements 1. Compute the product cost per meal produced under absorption costing and under variable costing Do this first for January and then for February 2. Prepare separate monthly income statements for January and for February using (a) absorption costing and (b) variable costing. 3. Is operating income higher under absorption costing or variable costing in January? In February? Explain the pattern of differences in operating income based on absorption costing versus variable costing. wwwwwwwwwwwwwwwwwwww the order they traditionally appear on absorption costing Income statements.) Ned's Entrees Income Statement (Absorption Costing) Month Ended January 31 Sales revenue Less: Cost of goods sold: Beginning finished goods inventory Cost of goods manufactured Cost of goods available for sale Ending finished goods inventory Cost of goods sold Gross profit Operating expenses 0 Operating income eing a Sornton.castinaand variable.casting. Jerences in og X i Data Table e highd bsorpt pares lonally e accuUITS Sales .. January 1,000 meals 1,400 meals February 1,300 meals 1,000 meals LA $ 3 sold: Production Variable manufacturing expense per meal Sales commission expense per meal. Total fixed manufacturing overhead ..... Total fixed marketing and administrative expenses $ N $ 2 d good $ $ 700 $ 700 anufac ailable $ 500 $ $ 500 goods Print Done