Cost Be .75B Prepare absorption and variable costing income statements P3- (Learning Objective 7) Marty's Entrees produces frozen meals, which it sells for $9 each. The company uses the FIFO inventory costing method, and it computes a new monthly fixed manufacturing head rate based on the actual number of meals produced that month. All costs and over oduction levels are exactly as planned. The following data are from Marty's Entrees' first pr two months in business: January February Sales Production." Variable manufacturing expense per meal. Sales commission expense per meal... Total fixed manufacturing overhead Total fixed marketing and administrative expenses. 1,400 meals 2,000 meals 1,800 meals 1,400 meals 700 500 $ 700 $ 500 Requirements 1. Compute the product cost per meal produced under absorption costing and under vari- able costing. Do this first for January and then for February. Prepare separate monthly income statements for January and for February, using (a) absorption costing and (b) variable costing. 2. 3. Is operating income higher under absorption costing or variable costing in January? In February? Explain the pattern of differences in operating income based on absorption costing versus variable costing