Income Statements under Absorption Costing and Variable Costing Joplin Industries Inc. manufactures and sells high-quality sporting goods equipment under its highly recognizable ]-Sports logo. The company began operations on May 1 and operated at 100% of capacity (72,600 units) during the first month, creating an ending inventory of 6,600 units. During June, the company produced 66,000 garments during the month but sold 72,600 units at $85 per unit. The June manufacturing costs and selling and administrative expenses were as follows: Number of Unit Total Units Cost Cost Manufacturing costs in June 1 beginning inventory: Variable 6,600 6,600 $34.00 13.00 $47.00 $224,400 85,800 Fixed Total $310,200 Manufacturing costs in June: Variable 66,000 66,000 Fixed $34.00 14.30 $48.30 $2,244,000 943,800 $3,187,800 Total Selling and administrative expenses in June: Variable Fixed 72,600 72,600 16.90 7.00 23.90 $1,226,940 508,200 $1,735,140 Total a. Prepare an income statement according to the absorption costing concept for June. Joplin Industries Inc. a. Prepare an income statement according to the absorption costing concept for June. Joplin Industries Inc. Absorption Costing Income Statement For the Month Ended June 30 Cost of goods sold: b. Prepare an income statement according to the variable costing concept for June. Joplin Industries Inc. Variable Costing Income Statement For the Month Ended June 30 Fixed costs: c. What is the reason for the difference in the amount of income from operations reported in (a) and (b)? , all of the Under the method, the fixed 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 income statement will have a lower income from operations