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 (222,000 units) during the first month, creating an ending inventory of 22,000 units. During February, the company produced 200,000 units during the month but sold 222,000 units at $520 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 22,000 23.00 22,000 $260.00 $5,720,000 506,000 Total Manufacturing costs in February: Variable Fixed $283.00 $6,226,000 200,000 $260.00 $52,000,000 200,000 26.50 5,300,000 $286.50 $57,300,000 Total Selling and administrative expenses in February: Variable 222,000 17.70 $3,929,400 222,000 Fixed 3.00 20.70 666,000 $4.595,400 Total This information has been collected in the Microsoft Excel Online file. 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. Cost of goods sold: Fresno Industries Inc. Absorption Costing Income Statement For the Month Ended February 28 b. Prepare an income statement according to the variable costing concept for February. Enter all amounts as positive numbers. 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 all of the fixed manufacturing cost is deducted in the period in which it is incurred, regardless of the amount of inventory income statement will have a lower Operating income. change. Thus, when inventory decreases, the