Income Statements under Absorption Costing and Variable Costing Joplin Industries Inc. manufactures and sells high-quality sporting goods equipment under its highly recognizable J-Sports logo. The company began operations on May 1 and operated at 100% of capacity (34,100 units) during the first month, creating an ending inventory of 3,100 units. During June, the company produced 31,000 garments during the month but sold 34,100 units at $120 per unit. The June manufacturing costs and selling and administrative expenses were as follows: Total Cost Cost Manufacturing costs in June 1 beginning inventory: Variable 3,100 $48.00 $148,800 Fixed 55,800 Total $66.00 $204,600 Manufacturing costs in June: Variable 31,000 31,000 $48.00 19.80 $67.30 $1,488,000 613,800 Fixed Total $2,101,800 Selling and administrative expenses in June Variable Feed 34,100 34,100 23.40 7.00 $797,940 238,700 Total 30.40 $1,036,640 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: ID) 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 dhi Fixed costs 0 c. What is the reason for the difference in the amount of income from operations 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 manufacturing cost is deducted in the period in which it is incurred, regardless of the amount of inventory change. Thus, when inventory decreases, the statement will have a lower income from operations all of the fixed income