Galiatin County Motors Inciassembles and selis snowmoblle engines. The company began operations on July 1 and operated at 100% of capacty during the first month. The following data summarize the results for July: a. Prepare an income statement according to the absorption costing concept. c. What is the reason for the difference in the amount of operating Income reported in (a) and (b)? Under the method, the fixed minufocturing cost included in the cost of goods sold is matched with the revenues. Under F. all of the fixed manufacturing cost is deducted in the period in which it is incurred, regardiess of the amount of inventory change. Thus, when inventory increases, the income statement will have a higher operating income