Nicky'sEntrees produces frozenmeals, which it sells for $ 12 each. The company uses the FIFO inventory costingmethod, 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 Nicky's Entrees

Nicky'sEntrees' first 2 months inbusiness:

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 forFebruary, using(a) absorption costing and(b) variable costing.
3. Is operating income higher under absorption costing or variable costing inJanuary? InFebruary? Explain the pattern of differences in operating income based on absorption costing versus variable costing.

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. (Round your answers to the nearestcent.)

Requirement 2a. Prepare separate monthly income statements for January and forFebruary, using absorption costing. (List the accounts and labels in the order they traditionally appear on absorption costing incomestatements.)

Requirement 2b. Prepare Nicky's Entrees' January and February income statements using variable costing. (List the accounts and labels in the order they traditionally appear on variable costing incomestatements.)

Requirement 3. Is operating income higher under absorption costing or variable costing inJanuary? InFebruary? Explain the pattern of differences in operating income based on absorption costing versus variable costing.

Data Table X January February Sales . 1,200 meals 1,600 meals Production . . . . 1,600 meals 1,500 meals Variable manufacturing expense per meal $ 6 6 Sales commission expense per meal . . .... . $ $ - Total fixed manufacturing overhead . . ...... $ 1,200 1,200 Total fixed marketing and administrative expenses $ 700 $ 700 Print DoneNicky's Entrees produces frozen meals, which it sells for $12 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 Nicky's Entrees' first 2 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 (a) absorption costing and (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. 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. (Round your answers to the nearest cent.) January February Absorption Variable Absorption Variable costing costing costing costing Total product cost $6.75 $6.00 $6.80 $6.00 Requirement 2a. Prepare separate monthly income statements for January and for February, using absorption costing. (List the accounts and labels in the order they traditionally appear on absorption costing income statements.) Nicky's Entrees Income Statement (Absorption Costing) Choose from any list or enter any number in the input fields and then continue to the next question. ?Requirement 2a. Prepare separate monthly income statements for January and for February, using absorp Nicky's Entrees Income Statement (Absorption Costing) Month Ended January 31 February 28 Sales revenue $14,400 $19.200 Less. Cost of goods sold: Beginning finished goods inventory Cost of goods manufactured Cost of goods available for sale Ending finished goods inventory Cost of goods sold Gross profit Operating expenses Operating incomeincome Statement (Variable Costing) Month Ended January 31 February 28 Sales revenue Variable expenses Variable cost of goods sold Beginning finished goods inventory Variable cost of goods manufactured Variable cost of goods available for sale Ending finished goods inventory Variable cost of goods sold Sales commission expense Contribution margin Fixed expenses Fixed manufacturing overhead Fixed marketing and administrative expenses Operating incomeFixed manufacturing overhead Fixed marketing and administrative expenses Operating income 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 was units sold. Absorption costing defers some of 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 costing 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 costs that absorption costing assigned to that inventory are expensed in This February's absorption costing income. Choose from any list or enter any number in the input fields and then continue to the next question. Save for LaterNicky's Entrees produces frozen meals, which it sells for $12 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 Nicky's Entrees' first 2 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 (a) absorption costing and (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. 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. (Round your answers to the nearest cent.)