Nicky'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.) Read the requirements. bts f2 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 f2 January Absorption Variable costing costing February Absorption Variable costing costing if 2 Questia Total product cost Requirement 2a. Prepare separate monthly income statements for January and for February, using absorption costing. Nicky's Entrees Income Statement (Absorption Costing) Month Ended January 31 February 28 Less: Less: 10 Requirement 2b. Prepare Nicky's Entrees' January and February income statements using variable costing Choose from any list or enter any number in the input fields and then continue to the next ? question. itte naf Requirement 2b. Prepare Nicky's Entrees' January and February income statements using variable costing. Nicky's Entrees Contribution Margin Income Statement (Variable Costing) Month Ended January 31 February 28 Less: Less: Choose from any list or enter any number in the input fields and then continue to the next question. 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 units sold Absorption costing defers some of M costs in the units of ending inventory. These costs will not be until those units are sold. Deferring these costs to the future January's absorption costing income In February absorption conting 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 assigned to that inventory are expensed in This iti M costs that absorption costing February's absorption costing income ON Choose from any list or enter any number in the input fields and then continue to the next question F u em i Data Table X Jai 3. Is per Uw sorp unit January February Sales. . 1,200 meals 1,400 meals Production.. . 1.500 meals 1.200 meals Variable manufacturing expense per meal.. $3 Sales commission expense per meal. $1 $1 Total fixed manufacturing overhead $900 $900 Total fixed marketing and administrative expenses . . $700 $700 $3 sting bry futu Janu absor is pr unil Print Done as was the case in this February, January's COSts that absorp