Income Statements under Absorption and Variable Costing

$\backslash$table$[[$Sales $(9,500$ units$),,],[$Production costs $(12,000$ units$)$:$,$$$355,000,],[$Direct materials,$192,000,],[$Direct labor,$96,000,],[$Variable factory overhead,$63,600,751,200],[$Fixed factory overhead,,$],[$Selling and administrative expenses:,$$116,400,],[$Variable selling and administrative expenses,$45,100,161,500]]$

If required, round interim per$-$unit calculations to the nearest cent.

A$)$ SOLVED

B$)$ Prepare an income statement according to the variable costing concept.

C$)$ What is the reason for the difference in the amount of income from operations reported in $($a$)$and $($b$)?$

Under the$\_\_\_\_\_\_\_\_\_\_\_\_($absoption costing$/$variable costing?$)$method$,$ the fixed manufacturing cost included in the cost of goods sold is matched with the revenues. Under $\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_($absoption costing$/$variable costing?$),$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 increases, the $\_\_\_\_\_\_\_\_\_\_\_\_($absoption costing$/$variable costing?$)$income statement will have a higher income from operations than will the variable costing income statement.