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

Sales (40,000 $90)	$3,600,000
Manufacturing costs (40,000 units):
Direct materials	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.

a. 1. Prepare an estimated income statement, comparing operating results if 40,000 and 50,000 units are manufactured in the absorption costing format. If an amount box does not require an entry leave it blank.

• Inventory, October 31
• Sales
• Total cost of goods sold
• Total fixed manufacturing costs
• Total selling and administrative expense

Marshall Inc.
Absorption Costing Income Statement
For the Month Ending October 31
	40,000 Units Manufactured	50,000 Units Manufactured
	$fill in the blank 7cae94f79fb0fcf_2	$fill in the blank 7cae94f79fb0fcf_3
Cost of goods sold:
	$fill in the blank 7cae94f79fb0fcf_5	$fill in the blank 7cae94f79fb0fcf_6
	fill in the blank 7cae94f79fb0fcf_8	fill in the blank 7cae94f79fb0fcf_9
	$fill in the blank 7cae94f79fb0fcf_11	$fill in the blank 7cae94f79fb0fcf_12
	$fill in the blank 7cae94f79fb0fcf_14	$fill in the blank 7cae94f79fb0fcf_15
	fill in the blank 7cae94f79fb0fcf_17	fill in the blank 7cae94f79fb0fcf_18
	$fill in the blank 7cae94f79fb0fcf_20	$fill in the blank 7cae94f79fb0fcf_21

a. 2. Prepare an estimated income statement, comparing operating results if 40,000 and 50,000 units are manufactured in the variable costing format. If an amount box does not require an entry leave it blank.

• Sales
• Total manufacturing margin
• Total variable cost of goods manufactured
• Total variable cost of goods sold
• Total variable selling and administrative expense

Marshall Inc.
Variable Costing Income Statement
For the Month Ending October 31
	40,000 Units Manufactured	50,000 Units Manufactured
	$fill in the blank 0cbf6a0bcffb01d_2	$fill in the blank 0cbf6a0bcffb01d_3
Variable cost of goods sold:
Variable cost of goods manufactured:	$fill in the blank 0cbf6a0bcffb01d_4	$fill in the blank 0cbf6a0bcffb01d_5
	fill in the blank 0cbf6a0bcffb01d_7	fill in the blank 0cbf6a0bcffb01d_8
	$fill in the blank 0cbf6a0bcffb01d_10	$fill in the blank 0cbf6a0bcffb01d_11
	$fill in the blank 0cbf6a0bcffb01d_13	$fill in the blank 0cbf6a0bcffb01d_14
	fill in the blank 0cbf6a0bcffb01d_16	fill in the blank 0cbf6a0bcffb01d_17
	$fill in the blank 0cbf6a0bcffb01d_19	$fill in the blank 0cbf6a0bcffb01d_20
Fixed costs:
	$fill in the blank 0cbf6a0bcffb01d_22	$fill in the blank 0cbf6a0bcffb01d_23
	fill in the blank 0cbf6a0bcffb01d_25	fill in the blank 0cbf6a0bcffb01d_26
Total fixed costs	$fill in the blank 0cbf6a0bcffb01d_27	$fill in the blank 0cbf6a0bcffb01d_28
	$fill in the blank 0cbf6a0bcffb01d_30	$fill in the blank 0cbf6a0bcffb01d_31