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Game Play manufactures video games that it sells for $39 each. The company uses a fixed manufacturing overhead allocation rate of $6 per game. Assume all costs and production levels are exactly as planned. The following data are from Game Play's first two months in business during 2018: 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 Absorption Variable costing costing Total product cost per game verhead allocation rate of $6 per game. Assume all costs and production levels are exactly as planned. The llowing data are from Game Play's first two months in business during 2018: Click the icon to view the data Data table Data Table ei Re og November Sales October 1,700 units 2,300 units 13 $ 2,800 units 2,300 units $ 13 5 5 Tol Production Variable manufacturing cost per game Sales commission cost per game Total fixed manufacturing overhead Total fixed selling and administrative costs 13,800 13,800 9,500 9,500 Print Done Bllo R Requirements ea eq osti 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. Total Print Done

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