Instructions $1$a$.$ Using the absorption costing concept, prepare income statements for May.

Income Statement Instructions

Big Sky Creations Company

Absorption Costing Income Statement $1$b$.$ Using the absorption costing concept, prepare income statements for June.

Income Statement Instructions

Big Sky Creations Company

Absorption Costing Income Statement $2$a$.$ Using the variable costing concept, prepare income statements for May.

Income Statement Instructions

Big Sky Creations Company

Variable Costing Income Statement$2$b$.$ Using the variable costing concept, prepare income statements for June.

Income Statement Instructions

Big Sky Creations Company

Variable Costing Income Statement

During the first month of operations ended May $31,$ Big Sky Creations Company produced $56,250$ designer cowboy boots, of which $52,950$ were sold.

Required:

$1.$ Using the absorption costing concept, prepare income statements for $($a$)$ May and $($b$)$ June.

$2.$ Using the variable costing concept, prepare income statements for $($a$)$ May and $($b$)$ June.

$3$a$.$ Explain the reason for the differences in operating income in $(1)$ and $(2)$ for May.

$3$b$.$ Explain the reason for the differences in operating income in $(1)$ and $(2)$ for June.

$4.$ Based on your answers to $(1)$ and $(2),$ did Big Sky Creations Company operate more profitably in May or in June? Explain.