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Jason'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 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. Requirement 2a. Prepare separate monthly income statements for January and for February, using absorption costing. Data table Jason'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. Kequirement zo. Frepare Jasons meals January ana rebruary income statements using vanabie cosung. Jason's Meals Contribution Margin Income Statement (Variable Costing) Month Ended Less: Less: Requirement 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 income variable costing income. This is because units produced were units sold. Absorption costing defers some of costs in the units of ending inventory. These costs will not be until those units are sold. Jason'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 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 income variable costing income. This is because units produced were units sold. Absorption costing defers some of costs in the units of ending inventory. These costs will not be until those units are sold. Deferring these costs to the future January's absorption costing income. In February, absorption costing operating income variable costing operating income. This is because units produced were units sold for the month. As inventory , as was the case in this February, January's costs that absorption costing assigned to that inventory are expensed in . This February's absorption costing income

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