Chapter 21 Homework eBook E Show Me How Estimated Income Statements, using Absorption and Variable Costing Prior to the first month of operations ending October 31, Marshall Inc. estimated the following operating results: Sales (20,000 x $71) $1,420,000 Manufacturing costs (20,000 units): Direct materials 852,000 Direct labor 202,000 Variable factory overhead 94,000 Fixed factory overhead 112,000 Fixed selling and administrative expenses 30,500 Variable selling and administrative expenses 36,800 The company is evaluating a proposal to manufacture 22,400 units instead of 20,000 units, thus creating an ending inventory of 2,400 units. Manufacturing the additional units will not change sales, unit variable factory overhead costs, total fixed factory overhead cost, or total selling and administrative expenses. a. 1. Prepare an estimated income statement, comparing operating results if 20,000 and 22,400 units are manufactured in the absorption costing format. If an amount box does not require an entry leave it blank. Marshall Inc. Absorption Costing Income Statement For the Month Ending October 31 20,000 Units Manufactured 22,400 Units Manufactured $ 1.420,000 1.420,000 Sales Cost of goods sold: Check My Work Previous Chapter 21 Homework eBook Show Me How a. 1. Prepare an estimated income statement, comparing operating results if 20,000 and 22,400 units are manufactured in the absorption costing format. If an amount box does not require an entry leave it blank. Marshall Inc. Absorption Costing Income Statement For the Month Ending October 31 20,000 Units Manufactured 22,400 Units Manufactured 1.420,000 1.420,000 Sales Cost of goods sold: Cost of goods manufactured 1.260.000 x Inventory, October 31 x Total cost of goods sold s $ Gross profit s $ Selling and administrative expenses Operating income $ $ Feedback Check My Work a. 1. Recall that under absorption costing the cost of goods manufactured includes direct materials, direct labor, and factory overhead costs. Both fixed and variable factory costs are included as part of factory overhead Calculate unit cost for direct materials, direct labor variable factory overhead, fixed factory overhead. Add together to get total unit cost. For 22,400 units, use the same unit costs for direct materials, direct labor and variable overhead but instead recalculate the fixed factory overhead and add this to obtain the unit cost at the 22.400 unit laval Sales - cost of noods manufactured - Inventory October 311 = Groer orofit Check My Work Previous Chapter 21 Homework eBook Show Me How Marshall Inc. Variable Costing Income Statement For the Month Ending October 31 20,000 Units Manufactured 22,400 Units Manufactured Sales Variable cost of goods sold: Variable cost of goods manufactured Inventory, October 31 Total variable cost of goods sold Manufacturing margin Variable selling and administrative expenses OOOOOOO OOD O CULD COLO Contribution margin s Fixed costs: Fixed factory overhead Fixed selling and administrative expenses Total fixed costs si Operating income Feedback Check My Work Previous