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 (44,000 units) during the first month, creating an ending inventory of 4,000 units. During February, the company produced 40,000 units during the month but sold 44,000 units at $100 per unit. The February manufacturing costs and selling and administrative expenses were as follows: a. Prepare an income statement according to the absorption costing concept for the month ending February 28. 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 of the fixed manufacturing cost is deducted in the period in which it is incurred, regardiess of the amount of inventory change. Thus, when inventory decreases, the income statement will have a lower operating income. b. Prepare an income statement according to the variable costing concept for the month ending February 28