Louie's Meals produces frozen meals, which it solls for $9 each. The company uses the FIFO inventory costing method, and it computes a new monthly fixed manufacturing overhead rate based on the actual number of meals produced that month All costs and production levels are exactly as planned. The following data are from the company's first two months in business Click the icon to view the data) Requirement 1. Compute the product cost per meal produced under absorption costing and under variable costing. Do this first for January and then for February January February Absorption Variable Absorption Variable costing costing costing costing Total product cost Requirement 2a. Prepare separato monthly income statements for January and for February, using absorption costing Louie's Meals Income Statement (Absorption Costing) Month Ended January 31 February 28 LOS LOS Requirement 2b. Prepare Louie's Meals' January and February income statements using variable costing. Louie's Meals Contribution Margin Income Statement (Variable Costing) Month Ended January 31 February 28 Less: Less unts sold Requirement 3. Is operating income higher under absorption costing or variable conting in January? In February? Explain the pattom of differences in operating income based on absorption costing Vorsus variable costing In January, absorption conting operating income y variable costing income. This is because unts produced were Absorption costing doters some of costs in the unts of onding inventory. These costs will not be January's absorption conting income In February, absorption costing operating income variable couling operating incomo. This is because units produced were units sold for the month until those are sold. Deferring those costs to the future Y costs that absorption costing assigned to that inventory are expened in As inventory This as was the case in this February, January's February's absorption costing income February 1,800 meals 1,600 meals January Sales 1,500 meals Production 2,000 meals Variable manufacturing expense per meal $4 Sales commission expense per meal $2 Total fixed manufacturing overhead $800 Total fixed marketing and administrative expenses . . $600 $4 $2 ... $800 $600 Print Done bt