Modified P6-73A Absorption and variable costing income statements 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 month in business: What is operating income in January under absorption costing? A. $1,600 B. $1,810 C. $2,800 D. $5,110 What is operating income in January under variable costing? A. $2,800 B. $5,110 C. $1,800 D. $1,600