Income statements under absorption costing and variable costing Fresno Industries Inc., manufactures and sells high-quality camping tents. The company began operations on January 1 and operated at 100% of capacity (189,000 units) during the first month, creating an ending inventory of 25,000 units. During February, the company produced 164,000 units during the month but sold 189,000 units at $560 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 25,000 $280.00 $7,000,000 Fixed 25,000 29.00 725,000 Total $309.00 $7,725,000 Manufacturing costs in February Variable 164,000 $280.00 $45,920,000 Fixed 164,000 5,494,000 Total $313.50 $51,414,000 Selling and administrative expenses in February Variable 189,000 22.30 $4,214,700 Fred 189.000 4.00 756,000 Total 26.30 $4,970,700 This information has been collected in the Microsoft Excel Online Open the spreadsheet, perform the required analysis, and input your answers in the questions below 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 Cost of goods sold: b. Prepare an income statement according to the variable costing concept for February. Enter all amounts as positive numbers. Fresno Industries Inc. Variable Costing Income Statement For the Month Ended February 28 Fixed costs: b. Prepare an income statement according to the variable costing concept for February, Enter all amounts as positive numbers Fresno Industries Inc. Variable Costing Income Statement For the Month Ended February 28 Fixed costs: c. What is the reason for the difference in the amount of Operating income reported in (a) and (b)? Under the method, the fixed manufacturing cost included in the cost of goods sold is matched with the revenues. Under cost is deducted in the period in which it is incurred, regardless of the amount of inventory change. Thus, when inventory decreases, the Operating income all of the foxed manufacturing income statement will have a lower