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Play Time manufactures video games that it sells for $40 each. The company uses a fixed manufacturing overhead a E? (Click the icon to view the data.) Read the requirements Requirement 1. Compute the product cost per game produced under absorption costing and under variable costing October 2018 Variable Absorption costing $ 18 $ November 2018 Absorption Variable costing costing $ 18 5 14 costing 14 Total product cost per game Requirement 2a. Prepare monthly income statements for October and November, including columns for each monti Play Time Absorption Costing Income Statement October 2018 November 2018 Total Net Sales Revenue $ 64,000 $ 120,000 $ 184,000 Cost of Goods Sold 28,800 54,000 82,800 Gross Profit 35 200 66,000 101,200 Selling and Administrative Costs 20,700 30.500 51,200 $ 14,500 $ Operating Income 35,500 $ 50,000 Requirement 2b. Prepare monthly income statements for October and November, including columns for each mon Play Time Variable Costing Income Statement October 2018 November 2018 Total Net Sales Revenue Operating Income - X Data table November Sales October 1.600 units 2,900 units 14 3,000 units 2,900 units 14 7 7 Production Variable manufacturing cost per game Sales commission cost per game Total fixed manufacturing overhead Total fixed selling and administrative costs 11,600 9,500 11,600 9,500 Print Done ul Play Time manufactures video games that it sells for $40 each. The company uses a fixed manufacturing overhead allocation rate of S4 per game. Assume all costs and production levels are exactly as planned. The following data are from Play Time's first two months in business during 2018 Click the icon to view the data) Read the requirements Requirements a. 1. Compute the product cost per game produced under absorption costing and under variable costing. 2. Prepare monthly income statements for October and November, including columns for each month and a total column, using these costing methods: absorption costing b. variable costing. 3. Is operating income higher under absorption costing or variable costing in October? In November? Explain the pattern of differences in operating income based on absorption costing versus variable costing. 4. Determine the balance in Finished Goods Inventory on October 31 and November 30 under absorption costing and variable costing. Compare the differences in inventory balances and the differences in operating income. Explain the differences in inventory balances based on absorption costing versus variable costing. Print Done 18 Tota 19 Data table Income Statement November 2018 4,000 $ 120.000 $ 8,800 54,000 35,200 66,000 20.700 30.500 8 19 Sales