b. Prepare an income statement according to the variable costing concept. Income Statement Instructions What is the reason for the difference in the amount of Operating income reported in (a) and (b)? Check all that apply. There is no difference; the Operating income reported in (a) and (b) is the same. Under absorption costing, when inventory increases, the income statement will have a lower Operating income than will the variable costing income statement. Under variable costing, all of the fixed factory overhead cost is deducted in the period in which it is incurred, regardless of the amount of inventory change. Under variable costing, the units that were produced but unsold include fixed factory overhead cost, which is not included in cost of goods sold. Under absorption costing, when inventory increases, the income statement will have a higher Operating income than will the variable costing income statement. Crazy Mountain Sports Inc. assembles and sells snowmobile engines. The company began operations on March 1 and operated at 100% of capacity during the first month. The following data summarize the results for March: Required: a. Prepare an income statement according to the absorption costing concept. b. Prepare an income statement according to the variable costing concept. c. What is the reason for the difference in the amount of Operating income reported in (a) and (b)? Absorption Costing Income Statement a. Prepare an income statement according to the absorption costing concept. Income Statement Instructions