Fresno Industries Inc., manufactures and sells high-quality camping tents. The company began operations on January 1 and operated at 100% of capacity (191.000 units) during the first month. creating an ending Inventory of 16,000 units. During February, the company produced 175,000 units during the month but sold 191,000 units at $590 per unit. The February manufacturing costs and selling and administrative expenses were as follows: Number of Total Unit Cost Units Cost Manufacturing costs in February 1 beginning Inventory: Variable 16,000 $295.00 $4,720,000 Fixed 16,000 25.00 400,000 Total $320.00 $5,120,000 Manufacturing costs in February Variable 175,000 $295.00 $51,625,000 Fixed 175,000 28.80 5,040,000 Total $323.80 $56,665,000 Selling and administrative expenses in February Variable 191,000 19.20 $3,667,200 Fixed 191,000 3.00 573,000 Total 22.20 54,240,200 This information has been collected in the Microsoft Excel Online file. Open the spreadsheet, perform the required analysis, and input your answers in the questions below a. Prepare an income statement according to the absorption costing concept for February. Enter all amounts as positive numbers, 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 February. Enter all amounts as positive numbers. Fresno Industries Inc. Variable Costing Income Statement For the Month Ended February 28 Fixed costs Under the c. What is the reason for the difference in the amount of Operating income reported in (a) and (b)? method, the fixed manufacturing cost included in the cost of goods sold is matched with the revenues. Under the fixed manufacturing cost is deducted in the period in which it is incurred, regardless of the amount or Inventory change. Thus, when inventory decreases, the Income statement will have a lower Operating income