Estimated Income Statements, using Absorption and Variable Costing Prior to the first month of operations ending October 31 , Marshall inc, estimated the following operating resuits: The compony is evaluating a proposal to manufacture 20,800 units instead of 18,400 units, thus creating an ending iniventory of 2,400 units, Manuifacturing the additional units will not change sales, unit variable factory overhesd costs, total fixed factory overhead cost, or total selling and adminivurative expenses. 3. 1. Prepare an estimated income statement, compering operating results if 16,400 and 20,800 units are manufactured in the absorption costing format. If an amount box does not require an entry leave it blonk a. 2. frepare an estimated incame statement, comparing operating results if 18,400 and 20,600 units are msnufactured in the variable costing format. If an amount box does nat require an entry leave ie blank. 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 operatons under absorption costing is caused by the allocation of averhesd cost cier a number of units, Thus, the cost of gonds sold is The difference can also be exptained by the smount of included in the inventory