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 (88,000 units) during the first month, creating an ending inventory of 6,000 units. During June, the company produced 80,200 garments during the month but sold 86,200 units at $92 per unit. The June manufacturing costs and selling and administrative expenses were as follows: Number of Units Unit Cost Total Cost Manufacturing costs in June 1 beginning inventory: $52 312,000 Variable Fixed Total Manufacturing costs in June: Variable Fixed Total 6,000 6,000 8 48,000 $60$360,000 80,200 $52 $ 4,170,400 10 802,000 $62$4,972,400 80,200 Manufacturing costs in June: $52 $4,170,400 10 802.000 $62 $4,972,400 Variable 80,200 Fixed Total Selling and administrative expenses in June: Variable 80,200 86,200 $24 2,068,800 Fixed 86,200 4 344,800 Total $28 $2,413,600 Required a. Prepare an income statement according to the absorption costing concept for June. b. Prepare an income statement according to the variable costing concept for June." c. What is the reason for the difference in the amount of income from operations reported in (a) and (b)? *Refer to the lists of Labels and Amount Descriptions for the exact wording of the answer choices for text entries. Be sure to complete the statement heading. A colon (:) will automatically appear if it is required. If a net loss is incurred, enter that amount as a negative number using a minus sign. a. Prepare an income statement according to the absorption costing concept for June. Refer to the lists of Labels and Amount Descriptions for the exact wording of the answer choices for text entries. Be sure to complete the statement heading. A colon () will automatically appear if it is required. If a net loss is ncurred, enter that amount as a negative number using a minus sign Joplin Industries Inc Absorption Costing Income Statement (Label) 2Cost of goods sold b. Prepare an income statement according to the variable costing concept for June. Refer to the lists of Labels and Amount Descriptions for the exact wording of the answer choices for text entries. Be sure to complete the statement heading. A colon (:) will automatically appear if it is required. If a net loss is incurred, enter that amount as a negative number using a minus sign Joplin Industries Inc Variable Costing Income Statement Label) c. What is the reason for the difference in the amount of income from operations reported in (a) and (b)? Check all that apply. Under absorption costing, when inventory decreases, the income statement will have a lower income from operations than will the variable costing income statement. Under variable costing, the units that were produced but unsold in May include fixed manufacturing cost, which is included in cost of goods sold for June There is no difference; the income from operations reported in (a) and (b) is the same Under variable costing, all of the fixed manufacturing cost is deducted in the period in which it is incurred, regardless of the amount of inventory change. Under absorption costing, when inventory decreases, the income statement will have a higher income from operations than will the variable costing income statement
