R 21-1AAbsorption and variable costing income statements During the first month of operations ended August 31, Kodiak Fridgeration Company manufactured 91,200 mini refrigerators, of which 81,360 were sold. Operating data for the month are summarized as follows: Sales $12,312,000 Manufacturing costs: Direct materials $7,296,000 Direct labor 1,824,000 Variable manufacturing cost 1,459,200 Fixed manufacturing cost 401,280 Selling & administrative expenses: Variable 1,231,200 Fixed 205,200 Instructions 1. Prepare an income statement based on the absorption costing concept. 2. Prepare an income statement based on the variable costing concept. 3. Explain the reason for the difference in the amount of operating income reported in (1) and (2) During the first month of operations ended August 31, Kodiak Fridgeration Company manufactured 91,200 mini refrigerators, of which 81,360 were sold. Operating data for the month are summarized as follows: unit cost Sales 12,312,000 Manufacturing costs: Direct materials 7,296,000 Direct labor 1,824,000 Variable manufacturing cost 1,459,200 Fixed manufacturing cost 401,280 10,980,480 120.40 Selling & administrative expenses: Variable 1,231,200 Fixed 205,200 1,436,400 Instructions 1. Prepare an income statement based on the absorption costing concept. 2. Prepare an income statement based on the variable costing concept. 3. Explain the reason for the difference in the amount of operating income reported in (1) and (2)