During the first month of operations ended May $31,$ Big Sky Creations Company produced $55,750$ designer cowboy boots, of which $52,650$ were sold. Operating data for the month are summarized as follows:

$1$

Sales

$$789,750\mathrm{.}00$

$2$

Manufacturing costs:

$3$

Direct materials

$$395,825\mathrm{.}00$

$4$

Direct labor

$117,075\mathrm{.}00$

$5$

Variable manufacturing cost

$61,325\mathrm{.}00$

$6$

Fixed manufacturing cost

$55,750\mathrm{.}00$

$629,975\mathrm{.}00$

$7$

Selling and administrative expenses:

$8$

Variable

$$26,325\mathrm{.}00$

$9$

Fixed

$26,325\mathrm{.}00$

$52,650\mathrm{.}00$

During June, Big Sky Creations produced $49,550$ designer cowboy boots and sold $52,650$ cowboy boots. Operating data for June are summarized as follows:

$1$

Sales

$$789,750\mathrm{.}00$

$2$

Manufacturing costs:

$3$

Direct materials

$$351,805\mathrm{.}00$

$4$

Direct labor

$104,055\mathrm{.}00$

$5$

Variable manufacturing cost

$54,505\mathrm{.}00$

$6$

Fixed manufacturing cost

$55,750\mathrm{.}00$

$566,115\mathrm{.}00$

$7$

Selling and administrative expenses:

$8$

Variable

$$26,325\mathrm{.}00$

$9$

Fixed

$26,325\mathrm{.}00$

$52,650\mathrm{.}00$

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.

$3$a$.$ Explain the reason for the differences in operating income in $(1)$ and $(2)$ for May.

$3$b$.$ Explain the reason for the differences in operating income in $(1)$ 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.