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Marty's Entrees 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. January 1,300 meals 1,600 meals February 1,600 meals 1,500 meals $ 3 $ 3 Sales Production Variable manufacturing expense per meal. Sales commission expense per meal. Total fixed manufacturing overhead Total fixed marketing and administrative expenses $ $ $ 2 2 1,200 $ $ 1,200 500 CA 500 $ 3. Is operating income higher under absorption costing or variable costing in January? In February? Explain Requirement 1. Compute the product cost per meal produced under absorption costing and under variable cos January Absorption Variable costing costing February Absorption Variable costing costing Total product cost Requirement 2a. Prepare separate monthly income statements for January and for February, using absorption Louie's Meals Income Statement (Absorption Costing) Choose from any list or enter any number in the input fields and then continue to the next question : Ask me anything e ing or Vanable costing in January? In February? Explain the patter o Total product cost Requirement 2a. Prepare separate monthly income statements for January and for February, using absorption costing Louie's Meals Income Statement (Absorption Costing) Month Ended January 31 February 28 Less: Choose from any list or enter any number in the input fields and then continue to the next question. Ask me anything 3. Is operating income higher under absorption costing or variable costing in January? In February? Explain the patte 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: Choose from any list or enter any number in the input fields and then continue to the next question Ask me anything 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 Requirement 3. Is operating income higher under absorption costing or variable costing in January? In February? Explain the pattern of differences in operating incom In January, absorption costing operating income variable costing income. This is because units produced were units sold Absorption costing defers some of V costs in the units of ending inventory. These costs will not be January's absorption costing income costs to the future t. Gebr. when than nantinn Arnrntin innan V.Abla AKTUALNA red.. Choose from any list or enter any number in the input fields and then continue to the next question Ask me anything 0 e 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 Requirement 3. Is operating income higher under absorption costing or variable costing in January? In February? Explain the pattern of differences in operating incon units sold 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 V January's absorption costing income. costs to the future units sold forti variable costing operating income. This is because units produced were In February, absorption costing operating income costs that absorption costing assigned to that inventory ar As inventory as was the case in this February, January's absorption costing income Choose from any list or enter any number in the input fields and then continue to the next question la Ask me anything