Louie's Meals produces frozen meats, which it sells for $8 each. The company uses the FIFO Inventory costing method, and it computes a new monthly fxed 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) Read the requirements 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 separate monthly income statements for January and for February, using absorption costing Lass Less Louie's Meals Income Statement (Absorption Costing) Month Ended January 31 February 28 Requirement 21. Prepare Loue's Meals' January and February income statements using variable costing Louie's Meals Louie's Meals produces frozen meals, which it sells for $8 each. The company uses the FIFO inventory costing method, and it computes a new monthly fixed manufacturing overhead rate based on the actual number 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) Read the requirements Requirement 2b. Prepare Louie's Meals' January and February income statements using variable costing. Louie's Meals Contribution Margin Income Statement (Variable Costing) Less Less: Month Ended January 31 February 25 CEED Requirement 3. Is operating income higher under absorption costing or variable costing in January? In February? Explain the pattam of differences in operating income based on absorption costing versus variable costings In January, absorption costing operating income variable costing income. This is because units produced were units sold Head the fi Less L Requirement 3. is operating income higher under absorption costing or variable costing in January? In February? Explain the pattern of differences in operating income based on absorption costing versus variable costing In January, absorption costing operating income variable costing income. This is because units produced were Absorption costing defers some of costs in the units of ending inventory. These costs will not be unt those units are sold Defening these costs to the future January's absorption costing income In February absorption costing operating income variable costing operating income. This is because units produced were units sold for the month As inventory as was the case in this February January's costs that absorption costing assigned to that inventory are expensed in This February's absorption costing 1 The company uses the FIFO inventory costing method, and it computes a new monthly fixed manufacturing The following data are from the company's first two months in business: 31 Data table costin varia incom January February Sales...... 1,600 meals 1,900 meals Production 2,000 meals 1,600 meals Variable manufacturing expense per meal... $5 $5 Sales commission expense per meal $2 $2 Total fixed manufacturing overhead. Total fixed marketing and administrative expenses.. $400 $800 $800 $400 Print Done - X variable costing operating income. This is because units produced were units sold for the month. January's costs that absorption costing assigned to that inventory are expensed in ts a