Income statements on and varie costing Free Industries Inc, manufactures and sols high-quality camping tents. The company began operations on January 1 and perated at 100of capacity 200.000 unts during the first month, creating an ending inventory of 10,000 units. During February, the company produced 182,000 units during the month but sold 200,000 units at $570 per unit. The February manufacturing costs and selling and administrative expemes were as fofos Number of Unit Total Units Cost Cost Manufacturing costs in February 1 beginning inventory variable 18.000 55,130,000 18,000 35.00 630,000 Total $320.00 $5,700,000 Manufacturing costs in February Variable 182,000 $285.00 551.570,000 182,000 7,352,800 Total $325,40$59,222.000 Selling and distritive expenses in February Variable 200,000 26.90 $5,380,000 wed 200,000 600.000 58.000 Fixed 18,000 35.00 630,000 Total $320.00 55,760,000 Manufacturing costs in February Variable 182,000 1285.00 $51,870,000 Fixed 182,000 40.40 7.352,800 Total 5325.40 $59.222.000 Selling and administrative expenses in February Variable 200,000 26.90 55,380,000 200,000 3.00 Fixed 600,000 Total 29.90 $5,000,000 This information has been collected in the Microsoft Excel Online e Open the spreadsheet, perform the request analys, and input your answers in the questions below Open she Prepare an come statement according to the absorption costing concept for February. Enter amounts ove numbers mindesten 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 Sales Cost of goods sold: Beginning inventory Cost of goods manufactured Total cost of goods sold Gross profit 5 Setting and administrative expenses Operating income D. Prepare an income statement according to the variable casting concept for February, Enter all amounts as positive numbers Fresno Industries Inc. Variable Costing Income Statement For the Month Ended February 28 Sales y Variable cost of goods sold Chapter 22 - Home Prepare animement according to the vanaling Concept for Fry Enterall amounts pour Fresno Industries Inc. Variable Costing Income Statement For the Month Ended February 28 Va costa de sol Variable selling and administrative pene Contribution margin Fad coat manufacturing cost Festing and administrative pene Total costs Oprice What the reason for the difference in the amount of Operating in comported in (a) and (b) under the cutting methout, the fived manufacturing cost included in the cost of good wodis matched with the under of the feed manufacturing costi deducted in the period in which it is incurred, gres of the amountary Thus, was inventory decres, the aption costing Income statement will have a lower Derating in Manifacturing margin Variable sing and administrative expenses Contribution margin Fixed costs Fixed manufacturing coste e solling and administratives Total fixo costs Operating income What is the reason for the difference in the amount of Operating income reported in (a) and (b Under the laration costing method, the lived manufacturing costluded in the cost of goods sold is matched with the revenues Under variable costing all of the fixed manufacturing cost is deducted in the period in which it is incurred, regardless of the amount of inventary change Thus, whert inventory decreases, the absorption costing income statment wit have a lower Operating income 3. Under absorption costing, the cost of goods manufactured includes direct materials, dimect laber, and factory overed costs. Both test and variable factory costs are included as part of factory overhead b. Under variable casting, the cost of goods manufactured includes only variable manufacturing costs