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 (192,000 units) during the first month, creating an ending inventory of 16,000 units. During February, the company produced 176,000 units during the month but sold 192,000 units at $600 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 16,000 $300.00 $4,800,000 Fixed 16,000 39.00 624,000 Total $339.00 $5,424,000 Manufacturing costs in February: Variable 176,000 $300.00 $52,800,000 Fixed 176,000 45.00 7,920,000 Total $345.00 $60,720,000 Selling and administrative expenses in February Variable 192,000 30.00 55,760,000 Fixed 192,000 4.00 768,000 Total 34.00 $6,528,000 This information hadharani 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: III b. Prepare an income statement according to the variable costing concept for February. Enter all amounts as posibve numbers. Fresno Industries Inc Variable Costing Income Statement For the Month Ended February 28 (III 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 change. Thus, when Inventory decreases, the income statement will have a lower Operating income