During August, Western Creations produced 48,900 designer cowboy hats and sold 52,450 cowboy hats, Operating data for August are summarized as follows: During August. Western Creations produced 48,900 designer cowboy hats and sold 52,450 cowboy hats. Operating data for August are summarized as follows: Required: 1. Using the absorption costing concept, prepare income statements for (a) July and (b) August * 2. Using the variable costing concept, prepare income statements for (a) July and (b) August * 3a. Explain the reason for the differences in the amount of income from operations in (1) and (2) for July. 3b. Explain the reason for the differences in the amount of income from operations in (1) and (2) for August. 4. Based on your answers to (1) and (2), did Western Creations Company operate more profitably in July or in August? Explain. * Refer to the lists 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 required. Enter Inventory, July 31 as a negative number using a minus sign. If a net loss is incurred, enter that amount as a negative number using a minus sign. Labels August 31 Cost of goods sold Fixed costs For the Month Ended August 31 For the Month Ended July 31 July 31 Variable cost of goods sold Amount Descriptions Contribution margin Contribution margin ratio Cost of goods manufactured Fixed manufacturing costs Fixed selling and administrative expenses Gross profit Income from operations Inventory, August 1 Inventory, July 31 Loss from operations Manufacturing margin Planned contribution margin Sales Sales mix Selling and administrative expenses Total cost of goods sold 3a. Explain the reason for the differences in the amount of income from operations in (1) and (2) for July. For July, income from operations reported under costing exceeds that reported under costing due to part of manufacturing costs that are expensed on the costing income statement, but not on the costing income statement. 3b. Explain the reason for the differences in the amount of income from operations in (1) and (2) for August. For August, income from operations reported under the costing income statement, but not on the costing is less than that reported under costing due to part of manufacturing costs from July that are expensed on 4. Based on your answers to (1) and (2), did Western Creations Company operate more profitably in viuy or in August? Explain Western Creations Company was under the variable costing concept The difierence in income reported under the absorption costing concept is due to allocating to the