Income Statements under Absorption Costing and Varia Costing Fresno Industries Inc. manufactures and self high-quality camping ents. The company began operations on January 1 and operated at 100 of capacity (49,500 units) during the first months, creating an ending inventory of 4,500 units. During February, the company produced 45,000 units during the month but sold 49,500 units 39 per unit. The February manufacturing costs and selling and administrative expenses were as follows: Number of Unit Total Units Cost Cost Manufacturing costs in February 1 beginning inventory: Variable 4,500 $38.00 $121,000 Fixed 4,500 14.00 53,000 Total $52.00 $234,000 Manufacturing costs in February Variable 45.000 38.00 $1,710,000 45,000 15.40 93,000 Total $53.40 $2,403,000 Seling and administrative expenses in February Variable 518.20 5900,000 Fixed 49,500 7.00 346,500 Total $25.20 $1,247.400 Fixed 49,500 a. Prepare an income statement according to the absorption costing concept for the month ending on y28 Fresno Industries Inc. Check My Work 2mone Check My Work uses remaining Previous a. Prepare an income statement according to the absorption costing concept for the month ending February 28. 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 the month ending February 28. Fresno Industries Inc Variable Costing Income Statement For the Month Ended February 28 Check My Work 2 more Check My Work uses remaining Save and b. Prepare an income statement according to the variable conting concept for the month ending February 28 Fresno Industries Ine. Variable Costing Income Statement For the Month Ended February 20 Fid c. What is the reason for the difference in the amount of cerating income reported in (a) ? Under the method, the fixed manufacturing cost included in the cost of goods sold matched with the revenue Under of the fixed manufacturing cost is deducted in the period in which it is incurred, regards of the amount of inventory change. That when inventory decreases the income statement will have a lower operating income