Translate Income statements under absorption costing and variable costing Fresno Industries Inc. manufactures and sells high-quality camping tents. The company began operations on January 1 and operated at 100% of capacity (166,000 units) during the first month, creating an ending inventory of 21,000 units. During February, the company produced 145,000 units during the month but sold 166,000 units at $540 per unit. The February manufacturing costs and selling and administrative expenses were as follows: Number of Total Unit Cost Units Cost Manufacturing costs in February 1 beginning inventory: Variable 21,000 $270.00 $5,670,000 Fixed 21,000 25.00 525,000 $295.00 $6,195,000 Total Manufacturing costs in February Variable Fixed 145,000 145,000 $270.00 $39,150,000 28.80 4,176,000 $298.80 $43,326,000 Total Selling and administrative expenses in February: Variable 166,000 19.20 $3,187,200 664,000 166,000 4.00 Fixed 23.20 $3,851,200 Total This information has been collected in the Microsoft Excel Online file. Open the spreadsheet, perform the required analysis, and input your answers in the questions below She a. Prepare an income statement according to the absorption costing concept for February, Enter all amounts as positive Fresno Industries Inc. Absorption Costing Income Statement For the Month Ended February 28 Sales Cost of goods sold: Beginning inventory Cost of goods manufactured Total cost of goods sold Gross profit Selling and administrative expenses Operating Income KSHEETA... KSHEET b. Prepare an income statement according to the variable costing concept for February. Enter all amounts as positive numb Fresno Industries Inc Variable Costing Income Statement For the Month Ended February 28 KCEL ALGO XCEL ALGO EXCELALGO Variable cost of goods sold Manufacturing margin ment/takeAssignmentMain.do?invoker=&takeAssignmentSessionLocator=&inprogress=false slate Fresno ITUUSLries TIC. Variable Costing Income Statement For the Month Ended February 28 Sales Variable cost of goods sold Manufacturing margin Variable selling and administrative expenses Contribution margin Fixed costs: Fixed manufacturing costs Fixed selling and administrative expenses Total fixed costs Operating income c. What is the reason for the difference in the amount of Operating income reported in (a) and (b)? Under the absorption costing method, the fixed manufacturing cost included in the cost of goods sold is matched with the re variable costing all of the fixed manufacturing cost is deducted in the period in which it incurred, regardless of the amount change. Thus, when inventory decreases the absorption costing income statement will have a lower Operating income. Feedbac