Directa 392.000 8. EX.21.08.ALGO 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: Saus (28.000 13,74,000 Manufacturing coa (20.000 1,460,400 Director Variable factory overhead 14.00 ed actory overhead 218,400 Foedseling and administrative pense Variable sering die 71.400 The company is evaluating a proposal to manufacture 31,200 units instead of 28,000 units, thus creating an ending inventory of 3,200 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 28,000 and 31,200 units are manufactured in the absorption costing format. If an amount box does not require an entry leave it blank. Marshalline Absception Costing Income Statement For the Month Feding Ortober 31 26,000 Units Manufactured 31,200 Units Manufactured Court of goods sold a. 2. Prepare an estimated income statement, comparing operating results if 28,000 and 31,200 units are manufactured in the variable costing format. If an amount box does not require an entry leave it blank. Marshall Inc Variable Costing Income Statement For the Month lading tebar 11 25,000 Units Manufactured 31,200 Units Manufactured Varate cost of goods Todo a. 2. Prepare an estimated income statement, comparing operating results if 28,000 and 31,200 units are manufactured in the variable costing format. If an amount box does not require an entry leave it blank. Marshall Inc. Variable Costing Income Statement For the Month Ending October 31 28,000 Units Manufactured 31,200 Units Manufactured Variable cost of goods sold: Fixed costs: Total fixed costs b. What is the reason for the difference in operating income reported for the two levels of production by the absorption costing income statement? The increase in income from operations under absorption costing is caused by the allocation of overhead cost over a number of units. Thus, the cost of goods sold is The difference can also be explained by the amount of overhead cost included in the inventory