Play Zone manufactures video games that it sells for $42 each. The company uses a fixed manufacturing overhead allocation rate of $4 per game. Assume all costs and production levels are exactly as planned. The following data are from Play Zone's first two months in business: (Click the icon to view the data.) Read the requirements. Requirement 1. Compute the product cost per game produced under absorption costing and under variable costing. Requirement 2a. Prepare monthly income statements for October and November, including columns for each month and a total column, using absorption costing. Play Zone Absorption Costing Income Statement Requirement 2b. Prepare monthly income statements for October and November, including columns for each month and a total column, using variable costing. Play Zone Variable Costing Income Statement October November Total Requirement 4. Determine the balance in Finished Goods Inventory on October 31 and November 30 under absorption costing and variable costing. Compare the differences in inventory balances and the differences in operating income. Explain the differences in inventory balances based on absorption costing versus variable costing. The higher inventory balance under is representative of the Under absorption costing, the difference in the product cost per game is whereas under variable costing, the difference in the product cost per game is Data table Play Zone manufactures video games that it sells for $42 each. The company uses a fixed manufacturing overhead allocation rate of $4 per game. Assume all costs and production levels are exactly as planned. The following data are from Play Zone's first two months in business: (Click the icon to view the data.) Read the requirements. Requirement 1. Compute the product cost per game produced under absorption costing and under variable costing. Requirement 2a. Prepare monthly income statements for October and November, including columns for each month and a total column, using absorption costing. Play Zone Absorption Costing Income Statement Requirement 2b. Prepare monthly income statements for October and November, including columns for each month and a total column, using variable costing. Play Zone Variable Costing Income Statement October November Total Requirement 4. Determine the balance in Finished Goods Inventory on October 31 and November 30 under absorption costing and variable costing. Compare the differences in inventory balances and the differences in operating income. Explain the differences in inventory balances based on absorption costing versus variable costing. The higher inventory balance under is representative of the Under absorption costing, the difference in the product cost per game is whereas under variable costing, the difference in the product cost per game is Data table