PLEASE answer all of the follwing, thank you!

Prior to the first month of operations ending October 31, Marshall Inc. estimated the following operating results:

1	Sales (28,800 $80)	$2,304,000.00
2	Manufacturing costs (28,800 units):
3	Direct materials	1,267,200.00
4	Direct labor	316,800.00
5	Variable factory overhead	172,800.00
6	Fixed factory overhead	221,760.00
7	Fixed selling and administrative expenses	28,800.00
8	Variable selling and administrative expenses	35,800.00

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?

Shawnee Motors Inc. assembles and sells snowmobile engines. The company began operations on August 1 and operated at 100% of capacity during the first month. The following data summarize the results for August:

1	Sales (38,000 units)		$9,500,000.00
2	Production costs (46,500 units):
3	Direct materials	$4,650,000.00
4	Direct labor	1,860,000.00
5	Variable factory overhead	1,162,500.00
6	Fixed factory overhead	697,500.00	8,370,000.00
7	Selling and administrative expenses:
8	Variable selling and administrative expenses	$1,250,000.00
9	Fixed selling and administrative expenses	235,000.00	1,485,000.00

Required:

a.

Prepare an income statement according to the absorption costing concept.*

b.

Prepare an income statement according to the variable costing concept.*

c.

What is the reason for the difference in the amount of income from operations reported in (a) and (b)?

* 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 it is required. Enter all amounts as positive numbers.

Inventory Valuation under Absorption Costing and Variable Costing

At the end of the first year of operations, 4,700 units remained in the finished goods inventory. The unit manufacturing costs during the year were as follows:

Direct materials	$27.30
Direct labor	14.10
Fixed factory overhead	7.10
Variable factory overhead	6.20

Determine the cost of the finished goods inventory reported on the balance sheet under (a) the absorption costing concept and (b) the variable costing concept.

Absorption costing	$
Variable costing	$