Mario's Foods 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 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.) Requirements 1. Compute the product cost per meal produced under absorption costing and under variable costing. Do this first for January and then for February 2. Prepare separate monthly income statements for January and for February, using the following: a. Absorption costing b. Variable costing 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. February Sales Production ........ .. ........ Variable manufacturing expense per meal ...... Sales commission expense per meal....... Total fixed manufacturing overhead ...... Total fixed marketing and administrative expenses.... $ January 1,600 meals 2,000 meals 3 1 800 s $ $ 1,900 meals 1,600 meals 3 1 800 600 ...... $ 600 3. Is operating income higher under absorption costing or variable costing in January? In February? absorption costing versus variable costing. Income Statement (Absorption Costing) Month Ended January 31 February 28 Less: Less: Contribution Margin income Statement Variable Costing Morth Ended Requirement is opening income higher under absorption conting or variable costing in January in February? Explain the pattern of differences in operating income based on absorption costing versus variable cowong In January absorption costing operating income variable costing income. This is because its produced were units sold costs in the units of ending inventory. These costs will not be un hose units weso. Deferring these Absorption in defers some of costs to the future January's borpion costing income Choose from any or an y number in the input fields and then continue to the next