During the first month of operations ended August 31, Kodiak Fridgeration Company manufactured 46,000 mini refrigerators, of which 40,000 were sold. Operating data for the month are summarized as follows: 1 Sales 2 Manufacturing costs: 3 Direct materials 4 Direct labor 5 Variable manufacturing cost $8,800,000.00 $3,450,000.00 1,196,000.00 782,000.00 6 Fixed manufacturing cost 598,000.00 6,026,000.00 7 Selling and administrative expenses: 8 Variable $600,000.00 9 Fixed 320,000.00 920,000.00 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). * 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. 1. Prepare an income statement based on the absorption costing concept. 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. 1 Sales 2 Cost of goods sold: 3 Cost of goods manufactured 4 Inventory, August 31 Kodiak Fridgeration Company Absorption Costing Income Statement For the Month Ended August 31 $8,800,000.00 5 Cost of goods sold 6 Gross profit 7 Selling and administrative expenses 8 Operating income $6,026,000.00 786,000.00 5,240,000.00 $3,560,000.00 920,000.00 $2,640,000.00 2. Prepare an income statement based on the variable costing concept. 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. 1 Sales 2 Variable cost of goods sold: Kodiak Fridgeration Company Variable Costing Income Statement For the Month Ended August 31 $8,800,000.00 3 Variable cost of goods manufactured 4 Inventory, August 31 5 Total variable cost of goods sold 6 Manufacturing margin 7 Variable selling and administrative expenses 8 Contribution margin 9 Fixed costs: $5,428,000.00 708,000.00 4,720,000.00 10 Fixed manufacturing costs $598,000.00 11 Fixed selling and administrative expenses 320,000.00 12 Total fixed costs 13 Operating income $4,080,000.00 600,000.00 $3,480,000.00 918,000.00 $2,562,000.00 3. Explain the reason for the difference in the amount of operating income reported in (1) and (2). The Operating income reported under future month under absorption variable costing. costing exceeds the Operating income reported under variable costing, due to variable manufacturing costs that are deferred to a