Game Source manufactures video games that it sells for $45 each. The company uses a fixed manufacturing overhead allocation of $4 per game. Assume all costs and production levels are exactly as planned. The following data are from Game Source's first two months in business during 2018:

W October November Sales 2,000 units 2.400 units 2,500 units 2,400 units Production $ 18 $ 18 3 3 Variable manufacturing cost per game Sales commission cost per game Total fixed manufacturing overhead Total fixed selling and administrative costs 9,600 9,600 7,500 7,500 Requintet. pering income higher under sin continger will controles pece Odcme is under Ination on the film watch ww did the product rus pertencenterpion og med offending com not expenses and remain in Fished Goods inventory a. 1. Compute the product cost per game produced under absorption costing and under variable costing. 2. Prepare monthly income statements for October and November, including columns for each month and a total column, using these costing methods: absorption costing. b b. variable costing. 3. Is operating income higher under absorption costing or variable costing in October? In November? Explain the pattern of differences in operating income based on absorption costing versus variable costing. 4. Determine the balance in Finished Goods Inventory on October 31 and November 30 under absorption costing and variable costing. Compare the differences in inventory balances and the differences in operating income. Explain the differences in inventory balances based on absorption costing versus variable costing