Variable and absorption costing, explaining operating-income differences. EntertainMe Corporation manufactures and sells 50-inch television sets and uses standard costing. Actual data relating to January, February, and March 2017 are as

Variable and absorption costing, explaining operating-income differences. EntertainMe Corporation manufactures and sells 50-inch television sets and uses standard costing. Actual data relating to January, February, and March 2017 are as follows: Transcribed Image Text: January
February
March
Unit data:
Beginning inventory
150
150
Production
1,500
1,400
1,520
Sales
1,350
1,400
1,530
Variable costs:
$ 1,000
$ 1,000
$ 1,000
Manufacturing cost per unit produced
Operating (marketing) cost per unit sold
800
800
800
Fixed costs:
Manufacturing costs
Operating (marketing) costs
$525,000
$525,000
$525,000
$130,000
$130,000
$130,000 Transcribed Image Text: The selling price per unit is $3,300. The budgeted level of production used to calculate the budgeted fixed
manufacturing cost per unit is 1,500 units. There are no price, efficiency, or spending variances. Any
production-volume variance is written off to cost of goods sold in the month in which it occurs.
1. Prepare income statements for EntertainMe in January, February, and March 2017 under (a) variable
costing and (b) absorption costing.
2. Explain the difference in operating income for January, February, and March under variable costing
and absorption costing.

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