The PAI CORPORATION manufactures and sells chairs. The company uses a standard costing system. Actual data relating to February and March of 2016 are: The budgeted level of production used to calculate the budgeted fixed manufacturing cost per unit is 1,000 units. There are no price, rate, spending, or efficiency variances. Any production volume variance is written off to cost of goods sold in the month in which it occurs. Required: What cost elements are included in inventory under the following systems: Absorption costing Variable costing Throughput costing What is the rationale in using each of the three systems identified in question one above. Prepare income statements for the PAI Corporation in February and March under the following systems: Absorption costing Variable costing Throughput costing Explain the difference in operating income between February and March between: Absorption and variable costing Variable costing and throughput costing