Instructions

During the first month of operations ended March $31,$ IceBox Fridgeration Company manufactured $165,000$ mini refrigerators, of which $150,000$ were sold. Operating data for the month are summarized as follows:

Required:

Prepare an income statement based on the absorption costing concept.

Prepare an income statement based on the variable costing concept.

Explain the reason for the difference in the amount of operating income reported in $(1)$ and $(2).$