Rosetta's Foods produces frozen meals that it sells for $13 each. The company computes a new monthly fixed manufacturing overhead allocation rate based on the planned number of meals to be produced that month. Assume all costs and production levels are exactly as planned. The following data are from Rosetta's Foods's first month in business: Requirement 2b. Prepare Rosetta's Foods's January income statement using variable costing. Sales 950 meals 1,150 meals Rosetta's Foods Variable manufacturing cost per meal Sales commission cost per meal Total fixed manufacturing overhead Total fixed selling and administrative costs Income Statement (Variable Costing) Month Ended January 31, 2018 690 450 PrintDone Operating Income Requirement
3. Is operating income higher under absorption costing or variable costing in January? In January, absorption costing operating income variable costing operating income.