During the first month of operations ended July 31, YoSan Inc. manufactured 11,400 flat panel televisions, of which 10,700 were sold. Operating data for the month are summarized as follows: $1,284,000 Sales Manufacturing costs: Direct materials Direct labor Variable manufacturing cost Fixed manufacturing cost Selling and administrative expenses: Variable Fixed $638,400 193,800 159,600 79,800 1,071,600 $107,000 49,200 156,200 1. Prepare an income statement based on the absorption costing concept. YoSan Inc. Absorption Costing Income Statement For the Month Ended July 31 Sales 1,284,000 Cost of goods sold: Cost of goods manufactured 159,600 Inventory, July 31 Total cost of goods sold 1,066,700 Gross profit 217,300 Selling and administrative expenses 156,200 Operating income 61,100 1,284,000 2. Prepare an income statement based on the variable costing concept. YoSan Inc. Variable Costing Income Statement For the Month Ended July 31 Sales Variable cost of goods sold: Cost of goods sold 159,600 Inventory, July 31 Variable cost of goods manufactured Manufacturing margin Variable selling and administrative expenses Total variable cost of goods sold 159,600 107,000 185,200 Fixed costs: Fixed manufacturing costs 79,800 Fixed selling and administrative expenses 49,200 Total fixed costs 129,000 Operating income 56,200 3. Explain the reason for the difference in the amount of operating income reported in (1) and (2). The operating income reported under absorption costing exceeds the operating income reported under variable manufacturing costs that are deferred to a future month under absorption costing. costing, due to fixed