Mark's Meals 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 overhead rate based on the actual number of meals produced that month. All costs and production levels are exactly as planned. The following data are from the company's first two months in business:(Click the icon to view the data.)Read the requirements.Less:Less:Requirement 2b. Prepare Mark's Meals' January and February income statements using variable costing.Mark's MealsContribution Margin Income Statement (Variable Costing)Month EndedLess:Less:In February, absorption costing operating incomeJanuary 31Requirement 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.In January, absorption costing operating incomevariable costing income. This is because units produced wereunits sold.Absorption costing defers some ofAs inventoryMFebruary 28as was the case in this February, January'scosts in the units of ending inventory. These costs will not be▼ until those units are sold. Deferring theseunits sold for the month.▼costs that absorption costing assigned to that inventory are expensed invariable costing operating income. This is because units produced wereThisData tableSales..Production...Variable manufacturing expense per meal.Sales commission expense per mealTotal fixed manufacturing overhead$800Total fixed marketing and administrative expenses.. $600Printcosts to the future▼ February's absorption costing income.January1.600 meals,2,000 mealsDone$3$1February1,800 meals1,600 meals$3$1$800$600▼ January's absorption costing income.- X Mark's Meals 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 overhead rate based on the actual number of meals produced that month. All costs and production levels are exactly as planned. The following data are from the company's first two months in business:(Click the icon to view the data.)Read the requirements.Requirement 1. Compute the product cost per meal produced under absorption costing and under variable costing. Do this first for January and then for February.FebruaryLess:LessJanuaryLess:AbsorptioncostingTotal product costRequirement 2a. Prepare separate monthly income statements for January and for February, using absorption costing.Mark's MealsIncome Statement (Absorption Costing)Month EndedLess:VariablecostingAbsorptioncostingVariablecostingRequirement 2b. Prepare Mark's Meals' January and February income statements using variable costing.Mark's MealsContribution Margin Income Statement (Variable Costing)Month EndedJanuary 31 February 28January 31February 28CData tableSales...Production..Variable manufacturing expense per meal.Sales commission expense per mealJanuary1,600 meals.2,000 mealsPrintTotal fixed manufacturing overhead$800Total fixed marketing and administrative expenses.. $600$3$1DoneFebruary1,800 meals1,600 meals$3$1$800$600X

Name: Mark's Meals produces frozen meals, which it sells for $9 each. The c
Uploaded: 2024-03-20T06:32:37.000Z
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Description: Mark's Meals 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 overhead rate based on the actual number of meals produced that month. All costs an