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Estimated Income Statements, using Absorption and Variable Costing Prior to the first month of operations ending October 31, Marshall Inc. estimated the following operating
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 (16,000 x $55) $880,000 Manufacturing costs (16,000 units): Direct materials 534,400 Direct labor 126,400 Variable factory overhead 59,200 Fixed factory overhead 70,400 Fixed selling and administrative expenses Variable selling and administrative expenses 19,100 23,200 The company is evaluating a proposal to manufacture 17,600 units instead of 16,000 units, thus creating an ending inventory of 1,600 units. Manufacturing the additi 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 16,000 and 17,600 units are manufactured in the absorption costing format. If an amou box does not require an entry leave it blank. Marshall Inc. Absorption Costing Income Statement For the Month Ending October 31 16,000 Units Manufactured 17,600 Units Manufactured Cost of goods sold: Previous No
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