Mario's Foods produces frozen meals, which it sols for $10 each. The company uses the FIFO inventory costing method, and it computos a now monthly food manufacturing overhead rate based on the actual number of moala 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 i Compute the product cost per meal produced under absorption coating and under variable costing Do this first for January and then for February January February Absorption Variable Absorption Variable costing costing costing costing Total productos Requirement 2a. Prepare separate monthly income statements for January and for February, using absorption conting (Check your seating careway and do not abbreviate) Mario's Foods Income Statement (Absorption Conting) Month Ended January 31 February 28 Less Less: Operating income (0) Requirement 2b. Prepare Mario's Foods' January and February income statements uning variablo costing. (Check your spelling carefully and do not abbreviate) Mario's Foods Contribution Margin Income Statement (Variable Costing) Month Ended Enter any number in the edit fields and then continue to the next question 10 U12 completo) This Test: 91 pts possit Mario's Foods produces frozen meals, which it sets for $10 each. The company uses the FIFO inventory costing method, and it computes a new monthly fixed manufacturing overhead tam based on the actual number of Moals 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 2b. Prepare Mario's Foods' January and February income statements using variable costing (Check your spelling curoruly and do not abbreviate) Mario's Foods Contribution Margin Income Statement (Variable Costing) Month Ended January 31 February 28 Less Less Operating income Requirement 3. la 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 is less than variable costing income. This is because units produced were units sold Absorption costing defers some of fixed manufacturing overhead costs in the units of ending inventory. These costs will not be sold. Deferring these costs to the future January's absorption costing income V unul those units are Enter any number in the edit fields and then continue to the next question rio's Foods me Statement (Variable Costina) nth i Data Table .X February 1,300 meals 1,000 meals $3 $2 January Sales.... ... 1,000 meals Production..... ... 1,400 meals Variable manufacturing expense per meal.. $3 Sales commission expense per meal. $2 Total fixed manufacturing overhead ... $700 Total fixed marketing and administrative expenses .. $300 .... $700 $300 Print Done gher ng. unit income is less than variable costing income. This is because units produced were to will not h
