During the first month follows: f operations ended May 31, Big Sky Creations Company produced 56,250 designer cowboy boats, of which 52,950 were sold. Operating data for the month are summarized as $794.250.00 Manufacturing costs: Direct materials $416,250.00 135,000.00 Direct labor Variable manufacturing cost 61,875.00 Fixed manufacturing cost 56,250.00 669,375.00 Selling and administrative expenses; Variable $31,770.00 > Fixed 26,475.00 58,245.00 During June, Big Sky Creations produced 49,650 designer cowboy boots and sold 52,950 cowboy boots Operating data for June are summarized as follows: 1 Sales $794,250.00 2 Manufacturing costs: 1 Sales 4 5 6 During June, Big Sky Creations produced 49,650 designer cowboy boots and sold 52,950 cowboy boots. Operating data for June are summarized as follows: 1 Sales $794,250.00 1 Manufacturing costs: 1 Direct materials $367,410.00 Direct labor 119.160.00 Variable manufacturing cost 54.615.00 Fixed manufacturing cost 56,250.00 597,435.00 Selling and administrative expenses: 5 Variable $31.770.00 Fixed 26,475.00 58,245.00 Required: 1. Using the absorption costing concept, prepare income statements for (a) May and (b) June.* 2. Using the variable costing concept, prepare income statements for (a) May and (b) June.* 3a. Explain the reason for the differences in operating income in (1) and (2) for May 3b. Explain the reason for the differences in operating income in (7) and (2) for June. 4. Based on your answers to (1) and (2), did Big Sky Creations Company operate more profitably in May or in June? Explain. *Be sure to complete the statement heading. Refer to the list of Labels and Amount Descriptions provided for the exact wording of the answer Absorption Costing Income Statement-May 1a. Using the absorption costing concept, prepare income statements for May. Be sure to complete the statement heading. Refer to the list of Labels and Amount Descriptions provided for the exact wording of the answer choices for text entries. A colon () will automatically appear if it is required. Enter amounts as positive numbers unless the amount is a calculation that results in a negative amount. For example: Net loss should be negative. Big Sky Creations Company Absorption Costing Income Statement (Label) 2 (Label) 5 Absorption Costing Income Statement-June Absorption Costing Income Statement-June 1b. Using the absorption costing concept, prepare income statements for June. Be sure to complete the statement heading. Refer to the list of Labels and Amount Descriptions provided for the exact wording of the answer choices for text entries. A colon (:) will automatically appear if it is required. Enter amounts positive numbers unless the amount is a calculation that results in a negative amount. For example: Net loss should be negative. Big Sky Creations Company Absorption Costing Income Statement (Label) 1 2 (Label) 3 4 5 6 7 8 2a. Using the variable costing concept, prepare income statements for May. Be sure to complete the statement heading. Refer to the list of Labels and Amount Descriptions provided for the exact wording of the answer choices for text entries. A colon () will automatically appear if it is required. Enter amounts as positive numbers unless the amount is a calculation that results in a negative amount. For example: Net loss should be negative. Big Sky Creations Company Variable Costing Income Statement (Label) 2 (Label) 5 9 (Label] 10 11 12 15 2b. Using the variable costing concept, prepare income statements for June. Be sure to complete the statement heading. Refer to the list of Labels and Amount Descriptions provided for the exact wording of the answer choices for text entries. A colon () will automatically appear if it is required. Enter amounts as positive numbers unless the amount is a calculation that results in a negative amount. For example: Net loss should be negative Big Sky Creations Company Variable Costing Income Statement 30 1 2 (Label) 3 4 5 6 1 8 9 (Label) 10 11 12 13 Final Questions 3a. Explain the reason for the differences in operating income in (1) and (2) for May For May, Operating income reported under expensed on the costing exceeds that reported under tatement, but not on the cos variable absorption 36. Explain the reason for the differences in ne in (1) and (2) for June For June, Operating income reported under costing is less than that reported under from May that are expensed on the costing income statement, but not on the 4. Based on your answers to (1) and (2), did Big Sky Creations Company operate more profitably in May or in June? Explain Big Sky Creations Company was absorption costing concept is due to allocating manufacturing costs that are costing due to part of manufacturing costs costing income statement. under the variable costing concept. The difference in operating income reported under the to the costing due to part of costing income statement