During first month of operations ended March $31,$ IceBox Fridgeration Company manufactured $165000$mini refridgerators, of which $150000$ were sold. Operating data for the month are summarized as follows:

Sales $11250000\mathrm{.}00$

Manufactoring costs:

Direct materials $1,980000\mathrm{.}00$

Direct labor: $4,290,000\mathrm{.}00$

Variable manufactoring cost $412,500\mathrm{.}00$

Fixed manufactoring cost $2,475,000\mathrm{.}00$

Selling and administrative expenses:

Variable $450000$

Fixed $1125000\mathrm{.}00$

Required:

$1.$ Prepare an income statement based on the absorption costing concept.

$2.$ Prepare an income statement based on the variable costing concept.

$3.$ Explain the reason for the difference in the amount of operating income reported in $1$ and $2.$