Income Statements under Absotption Costing and Variable Costing Gallatin County Motors inc, assembles and sells snowmobile engines. The company began operations on July 1 and operated at 100% of capscity during the first month. The following data suminarize the results for July: If required, round interim per-unit calculations to the nearest cent. a. Prepare an income statement abcording to the absoeption costing concept. b. Prepare an income statement accotding to the variable costing concept. Callatin County Motors Inci Variable Costing Income c. What is the reason for the difference in the amount of operating income reported in (a) and (b)? Under the with the revenues. Under method, the fixed manufacturing cost included in the cost of goods sold is matched which it is incurred, regardless of the amount of inventory change. Thus, when inventory increases, the income statement will have a higher operating income