During the first month of operations ended March 31, 2016, Hip and Conscious Clothing Company produced 55,500 designer cowboy hats, of which 51,450 were sold. Operating data for the month are summarized as follows:

1	Sales		$771,750.00
2	Manufacturing costs:
3	Direct materials	$471,750.00
4	Direct labor	127,650.00
5	Variable manufacturing cost	61,050.00
6	Fixed manufacturing cost	55,500.00	715,950.00
7	Selling and administrative expenses:
8	Variable	$36,015.00
9	Fixed	25,725.00	61,740.00

During April, Hip and Conscious Clothing produced 47,400 designer cowboy hats and sold 51,450 cowboy hats. Operating data for April are summarized as follows:

1	Sales		$771,750.00
2	Manufacturing costs:
3	Direct materials	$402,900.00
4	Direct labor	109,020.00
5	Variable manufacturing cost	52,140.00
6	Fixed manufacturing cost	55,500.00	619,560.00
7	Selling and administrative expenses:
8	Variable	$36,015.00
9	Fixed	25,725.00	61,740.00

Required:

1.

Using the absorption costing concept, prepare income statements for (a) March and (b) April.*

2.

Using the variable costing concept, prepare income statements for (a) March and (b) April.*

3a.

Explain the reason for the differences in the amount of income from operations in (1) and (2) for March.

3b.

Explain the reason for the differences in the amount of income from operations in (1) and (2) for April.

4.

Based on your answers to (1) and (2), did Hip and Conscious Clothing Company operate more profitably in March or in April?

* 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. Less, Plus or colons (:) will automatically appear if required. If a net loss is incurred, enter that amount as a negative number using a minus sign.

1a. Using the absorption costing concept, prepare income statements for (a) March and (b) April . 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. Less, Plus or colons (-) will automatically appear if required. If a net loss is incurred, enter that amount as a negative number using a minus sign. The following income statement is for March. Hip and Conscious Clothing Company Score: 12/66 Absorption Costing Income Statement For the Month Ended March 31, 2016 1 Sales $771,750.00 2 Cost of goods sold: 3 Beginning inventory $0.00 4 Less Cost of goods manufactured 715,950.00 5 ending inventory 52,245.00 6 Cost of goods sold $663,705.00 7 Gross profit 108,045.00 8 Selling and administrative expenses 1b. Using the absorption costing concept, prepare income statements for (a) March and (b) April. 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. Less, Plus" or colons (:) will automatically appear if required. If a net loss is incurred, enter that amount as a negative number using a minus sign. The following income statement is for April. Hip and Conscious Clothing Company Score: 38/66 Absorption Costing Income Statement For the Month Ended April 30, 2016 1 Sales $771,750.00 2 Cost of goods sold: 3 Beginning inventory $52,245.00 4 Cost of goods manufactured 619,560.00 5 ending inventory 0.00 6 Cost of goods sold $671,805.00 7 Selling and administrative expenses 99,945.00 8 Variable selling and administrative expenses 2a. Using the variable costing concept, prepare income statements for (a) March and (b) April. 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. "Less, Plus" or colons (:) will automatically appear if required. If a net loss is incurred, enter that amount as a negative number using a minus sign. The following income statement is for March. Hip and Conscious Clothing Company Score: 24/102 Variable Costing Income Statement For the Month Ended March 31, 2016 1 Sales $771,750.00 2 Variable cost of goods sold: 3 Beginning inventory $0.00 4 Less Cost of goods manufactured 660,450.00 5 ending inventory 48,195.00 6 Cost of goods sold $612,255.00 7 Selling and administrative expenses 36,015.00 8 Variable selling and administrative expenses $648,270.00 9 Fixed costs: 10 Manufacturing margin $123,480.00 11 Fixed selling and administrative expenses 55,500.00 12 Sales mix $81,225.00 2b. Using the variable costing concept, prepare income statements for (a) March and (b) April . 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. Less", "Plus" or colons (:) will automatically appear if required. If a net loss is incurred, enter that amount as a negative number using a minus sign. The following income statement is for April. Hip and Conscious Clothing Company Score: 2/102 Variable Costing Income Statement For the Month Ended April 30, 2016 1 2 Variable cost of goods sold: 3 4 5 6 7 8 9 (Label) 10 11 12 4. Based on your answers to (1) and (2), did Hip and Conscious Clothing Company operate more profitably in March or in April? The company was equally profitable in March and April under the variable costing concept. O The company was equally profitable in March and April under the absorption costing concept. The company was more profitable in April. The company was more profitable in March