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 (30,400 x $106) $3,222,400 Manufacturing costs (30,400 units): Direct materials 1,939.520 Direct labor 459,040 Variable factory overhead 215,840 Fixed factory overhead 255,360 Fixed selling and administrative expenses 69,500 Variable selling and administrative expenses 34,000 The company is evaluating proposal to manufacture 33,600 units instead of 30,400 units, thus creating an ending inventory of 3.200 units. Manufacturing the additional units will not change sales, unit variable factory overhead costs, total fored factory overhead cost, or total sering and administrative expenses a. 1. Prepare an estimated income statement, comparing operating results of 30,400 and 33,600 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 30,400 Units Manufactured 33,600 Units Manufactured Cost of goods sold QOLLID Hudhui a. 2. Prepare an estimated income statement, comparing operating results if 30,400 and 33,600 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 30,400 Units Manufactured 33,600 Units Manufactured Variable cost of goods sold: OVOLJOJ DODO O DOQQUI QOLD Mixed costs Total fixed costs b. What is the reason for the difference in operating income reported for the trees of production by the option couting income statement? The increase in income from operations under absorption costing by the location of overhead cost over number of units. Thus, the cost of goods The difference can be explained by the amount of overhead cost included in the inventory