3. The difference between absorption and variable costing is due solely to moving (Options: fixed manufacturing costs, fixed operating costs, variable manufacturing costs, or variable manufacturing costs) into inventories as inventories (Options: increase or decrease) and out of inventories as they (Options: increase or decrease).

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EntertainMe Corporation manufactures and sells 50-inch television sets and uses standard costing. Actual data relating to January, February, and March 2017 are as follows: February March 150 150 1,400 1,400 1,520 1,530 January Unit data: Beginning inventory 0 Production 1,500 Sales 1,350 Variable costs: Manufacturing cost per unit produced $ 1,000 Operating (marketing) cost per unit $ 800 sold Fixed costs: Manufacturing costs $525,000 Operating (marketing) costs $130,000 $1,000 $ 800 $ 1,000 $ 800 $525,000 $130,000 $525,000 $130,000 The selling price per unit is $3,300. The budgeted level of production used to calculate the budgeted fixed manufacturing cost per unit is 1,500 units. There are no price, efficiency, or spending variances. Any -production-volume variance is written off to cost of goods sold in the month in which it occurs. 1. Prepare income statements for EntertainMe in January, February, and March 2017 under (a) variable costing and (b) absorption costing. 2. Explain the difference in operating income for January, February, and March under variable costing and absorption costing