Instructions Prior to the first month of operations ending October 31, Marshall Inc, estimated the following operating results: structions 1 Sales (28,800 * $90) $2,592,000.00 2 Manufacturing costs (28,800 units): 3 Direct materials 1,209,600.00 4 Direct labor 288,000.00 5 Variable factory overhead 115,200.00 6 Fixed factory overhead 221,760.00 7 Fixed selling and administrative expenses 29,400.00 S Variable selling and administrative expenses 35,400.00 The company is evaluating a proposal to manufacture 36,000 units instead of 28,800 units, thus creating an ending inventory of 7,200 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. Required: a. Prepare an estimated income statement, comparing operating results if 28,800 and 36,000 units are manufactured in (1) the absorption costing format and (2) the variable costing format. Refer to the lists of Labels and Amount Descriptions for the exact wording of the answer choices for text entries. Be sure to complete the statement heading. A colon () will automatically appear if required. Round your unit cost to two decimal places and final answers to the nearest dollar amount. Enter all amounts as positive numbers. b. What is the reason for the difference in income from operations reported for the two levels of production by the absorption costing income statement? Ir Absorption Costing Income Statement a(1). Prepare an estimated income statement, comparing operating results i 28,800 and 36,000 units are manufactured in T the absorption costing format. Refer to the lists of Labels and Amount Descriptions for the exact wording of the answer c choices for text entries. Be sure to complete the statement heading. A colon () will automatically appear if required. Round s your unit cost to two decimal places and final answers to the nearest dollar amount. Enter all amounts as positive numbers. ar Marshall Inc Absorption Costing Income Statement (Label) 1 28,800 Units Manufactured 36,000 Units Manufactured 2 3 4 5 6 In Absorption Costing Income Statement T Absorption C CI SA a 2 3 4 un 5 6 7 8 00 9 9 Labels Fixed costs For the Month Ending October 31 October 31 Amount Descriptions Contribution margin Contribution margin ratio Cost of goods manufactured Cost of goods sold Fixed factory overhead Fixed selling and administrative expenses Gross profit Income from operations Inventory, October 31 Loss from operations Manufacturing margin Planned contribution margin Sales Sales mix Selling and administrative expenses Total cost of goods sold Total fixed costs Total variable cost of goods sold Variable cost of goods manufactured Variable cost of goods manufactured Variable cost of goods sold Variable selling and administrative expenses
