Crazy Mountain Sports Inc. assembles and sells snowmobile engines. The company began operations on March $1$ and operated at $100\%$ of capacity during the first month. The following data summarize the results for March:

$1$

Sales $(33,000$ units$)$

$$8,250,000\mathrm{.}00$

$2$

Production costs $(40,500$ units$)$:

$3$

Direct materials

$$3,240,000\mathrm{.}00$

$4$

Direct labor

$1,822,500\mathrm{.}00$

$5$

Variable factory overhead

$1,012,500\mathrm{.}00$

$6$

Fixed factory overhead

$607,500\mathrm{.}00$

$6,682,500\mathrm{.}00$

$7$

Selling and administrative expenses:

$8$

Variable selling and administrative expenses

$$1,160,000\mathrm{.}00$

$9$

Fixed selling and administrative expenses

$230,000\mathrm{.}00$

$1,390,000\mathrm{.}00$

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 Operating income reported in $($a$)$ and $($b$)?$