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 (46,200 units) during the first month, creating an ending inventory of 4,200 units. During February, the company produced 42,000 units during the month but sold 46,200 units at $115 per unit. The February manufacturing costs and selling and administrative expenses were as follows: Number of Unit Units Total Cost Cost Manufacturing costs in February 1 beginning inventory: Variable Fixed 4,200 $46.00 $193,200 4,200 17.00 71,400 Total Manufacturing costs in February: Variable Fixed $63.00 $264,000 42,000 $46.00 $1,932,000 42,000 18.70 785,400 $64.70 $2,717,400 Total Selling and administrative expenses in February: Variable 46,200 Fixed 46,200 7.00 $22.10 $1,021,020 323,400 $29.10 $1,344,420 Total a. Prepare an income statement according to the absorption costing concept for the month ending February 28 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: 10000 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: 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 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 foxed manufacturing cost included in the cost of goods sold is matched with the revenues, Under fixed manufacturing cost is deducted in the period in which it is incurred, regardless of the amount of inventory change. Thus, when inventory decreases, the s income statement will have a lower operating income. 2. all of the