come statements under absorption costing and variable costing Absorption Costing Income Statement Instructions Labels and Amount Descriptions Instructions Shawnee Motors Inc. assembles and sells snowmobile engines. The company began operations on August 1 and operated at 100% of capacity during the first month. The following data summarize the results for August 59.500.000.00 1 $3.560.000.00 2.002.500.00 1.112.500.00 662500.00 7542,500.00 Sales (38,000 units) Production costs (44500 units Direct materials Director Variable factory overhead Foxed factory overhead Selling and administrative expenses Variable selling and administrative expenses ng and administrative experses $1,150,000.00 245,000.00 1375.000.00 Using Instructions Labels and Amount Descriptions Absorption Costing Income Statement Instructions Direct materials $3,560,000.00 Direct labor Variable factory overhead 2,002,500.00 1,112,500.00 Fixed factory overhead 667,500.00 7,542,500.00 7 Selling and administrative expenses: Variable selling and administrative expenses $1,130,000.00 245,000.00 Fixed selling and administrative expenses 1,375,000.00 Required: a. Prepare an income statement according to the absorption costing concept b. Prepare an income statement according to the variable costing concept c. What is the reason for the difference in the amount of income from operations reported in (a) and (b)? *Refer to the list of Labels and Amount Descriptions for the exact wording of the answer choices for text entries. Be sure to complete the statement heading. A colon () will automatically appear if it is required. Enter all amounts as positive numbers Income statements under absorption costing and variable costing Instructions Labels and Amount Descriptions Absorption Costing Income Statement Final Question c. What is the reason for the difference in the amount of income from operations reported in (a) and (b) Check av ar apply There is no difference, the income from operations reported in (a) and (b) is the same. Under absorption costing, when inventory increases, the income statement will have a higher income from operations than will the variable costing Income statement Under variable costing, all of the food factory overhead cost is deducted in the period in which it is incurred, regardless of the amount of inventory change. Under variable costing, the units that were produced but unsold include foved factory overhead cost, which is not included in cost of goods sold Under absorption costing, when inventory increases, the income statement will have a lower income from operations than will the variable costing income statement