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 (27,200 x $96) $2,611,200 Manufacturing costs (27,200 units): Direct materials 1,572,160 Direct labor 372,640 Variable factory overhead 174,080 206,720 Fixed factory overhead Fixed selling and administrative expenses 56,200 Variable selling and administrative expenses 68,000 The company is evaluating a proposal to manufacture 30,400 units instead of 27,200 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 27,200 and 30,400 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 27,200 Units Manufactured 2,611.200 30,400 Units Manufactured Sales 2,611,200 Cost of goods sold: Cost of goods manufactured 2,325,600 2,303,840 a. 1. Prepare an estimated income statement, comparing operating results if 27,200 and 30,400 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 27,200 Units Manufactured 30,400 Units Manufactured Sales 2,611,200 2,611,200 Cost of goods sold: Cost of goods manufactured 2.325,600 2,303,840 Chapter 07 Homework (Application) assignment take frame Inventory, October 31 Total cost of goods sold $ $ Gross profit $ Selling and administrative expenses Operating income a. 2. Prepare an estimated income statement, comparing operating results if 27,200 and 30,400 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 27,200 Units Manufactured 30,400 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 Contribution margin $ QOQQOL QO01 ICON ODIA Fixed costs: Fixed factory overhead Fixed selling and administrative expenses Total fixed costs Operating income