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b. Prepare an income statement according to the variable costing concept. c. What is the reason for the difference in the amount of operating income
b. Prepare an income statement according to the variable costing concept. c. What is the reason for the difference in the amount of operating income reported in (a) and (b)? Under the method, the fixed manufacturing cost included in the cost of goods sold is matched with the revenues. Under , all of the fixed manufacturing cost is deducted in the period in which it is incurred, regardless of the amount of inventory change. Thus, when inventory increases, the income statement will have a higher operating income. If required, round interim per-unit calculations to the nearest cent. a. Prepare an income statement according to the absorption costing concept. Income Statements under Absorption Learnng Objective 1 March: Sales (18,500 units) Production costs (24,000 units): Direct materials Direct labor Variable factory overhead Fixed factory overhead Selling and administrative expenses: Variable selling and administrative expenses Fixed selling and administrative expenses $2,590,000 $1,243,200597,600297,600199,2002,337,600 $362,300 140,300502,600
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