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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 (40,000 x $90) Manufacturing costs (40,000 units): Direct materials $3,600,000 1,440,000 Direct labor 480,000 Variable factory overhead 240,000 Fixed factory overhead 120,000 Fixed selling and administrative expenses 75,000 Variable selling and administrative expenses 200,000 The company is evaluating a proposal to manufacture 50,000 units instead of 40,000 units, thus creating an ending inventory of 10,000 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.
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