eBook Show Me How Print Item Income Statements under Absorption Costing and Variable Costing Fresno Industries Inc. manufactures and sells high-quality camping tents. The company began operations on January 1 and operated at 100% of capacity (62,700 units) during the first month, creating an ending inventory of 5,700 units. During February, the company produced 57,000 units during the month but sold 62,700 units at $80 per unit. The February manufacturing costs and selling and administrative expenses were as follows: Number of Unit Total Units Cost Cost Manufacturing costs in February 1 beginning inventory: Variable 5,700 $32.00 $182,400 Fixed 5,700 12.00 68,400 Total $44.00 $250,800 Manufacturing costs in February Variable 57,000 $32.00 $1,824,000 Fixed 57,000 13.20 752,400 Total $45.20 $2,576,400 Selling and administrative expenses in February Variable 62,700 $15.60 $978,120 Fixed 62,700 7.00 438,900 Total $22.60 $1,417,020 a. Prepare an income statement according to the absorption costing concept for the month ending February 28, Fresno Industries Inc. Check My Work 4 more Check My Work uses remaining All work saved. Email instructor Save and Exit Submit Assignment for Grading eBook Show Me How Print Item a. Prepare an income statement according to the absorption costing concept for the month ending February 28. Fresno Industries Inc. Absorption Costing Income Statement For the Month Ended February 28 Cost of goods sold: b. Prepare an income statement according to the variable costing concept for the month ending February 28. Fresno Industries Inc. Variable Costing Income Statement For the Month Ended February 28 Previous Next Check My Work 4 more Check My Work uses remaining, b. Prepare an income statement according to the variable costing concept for the month ending February 28. Fresno Industries Inc. Variable Costing Income Statement For the Month Ended February 28 Fixed costs: 8 c. What is the reason for the difference in the amount of operating Income reported in (a) and (b)? Under the method, the fixed manufacturing cost included in the cost of goods sold is matched with the revenues. Under all of the fixed manufacturing cost is deducted in the period in which it is incurred, regardless of the amount of inventory change. Thus, when Inventory decreases, the Income statement will have a lower operating income. Check My Work 4 more Check My Work uses remaining, Previous Next All work saved. Email Instructor Save and Exit Submit Assignment for Grading