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 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 Fixed costs: Marshall Inc. Variable Costing Income Statement For the Month Ending October 31 40,000 Units Manufactured Fixed factory overhead ✓ 3,600,000 $ √ 2,160,000 $ √ 2,160,000 $ √ 1,440,000 200,000 $ √ 1,240,000 120,000 $X $ √ 2,700,000 540,000 $ X $ X 50,000 Units Manufactured X $ X 120,000
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 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 Fixed costs: Marshall Inc. Variable Costing Income Statement For the Month Ending October 31 40,000 Units Manufactured Fixed factory overhead ✓ 3,600,000 $ √ 2,160,000 $ √ 2,160,000 $ √ 1,440,000 200,000 $ √ 1,240,000 120,000 $X $ √ 2,700,000 540,000 $ X $ X 50,000 Units Manufactured X $ X 120,000
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
![Operating income
Sales
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.
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
Fixed costs:
$ ✓
1,045,000
Fixed factory overhead
Marshall Inc.
Variable Costing Income Statement
For the Month Ending October 31
40,000 Units
Manufactured
$ ✓
3,600,000
$ ✓
2,160,000
$ ✓
2,160,000
$ ✓
1,440,000
200,000
$ ✓
1,069,000
1,240,000
$ ✓
120,000
$ X
$ ✓
2,700,000
540,000
$ X
$ X
50,000 Units
Manufactured
X
$ X
$ ✓
120,000](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F3717f9df-8e3e-4fb1-bc0e-e458f495caa3%2F811acf63-1ecc-4886-b86c-5a24bb8d07cb%2Fbr9x8rn_processed.png&w=3840&q=75)
Transcribed Image Text:Operating income
Sales
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.
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
Fixed costs:
$ ✓
1,045,000
Fixed factory overhead
Marshall Inc.
Variable Costing Income Statement
For the Month Ending October 31
40,000 Units
Manufactured
$ ✓
3,600,000
$ ✓
2,160,000
$ ✓
2,160,000
$ ✓
1,440,000
200,000
$ ✓
1,069,000
1,240,000
$ ✓
120,000
$ X
$ ✓
2,700,000
540,000
$ X
$ X
50,000 Units
Manufactured
X
$ X
$ ✓
120,000
![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 (40,000 x $90)
$3,600,000
Manufacturing costs (40,000 units):
Direct materials
Direct labor
Variable factory overhead
Fixed factory overhead
Fixed selling and administrative expenses
Variable selling and administrative expenses
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.
Sales
Cost of goods sold:
Cost of goods manufactured
Inventory, October 31
Total cost of goods sold
Gross profit
✓
✓
✓
1,440,000
480,000
240,000
120,000
75,000
200,000
Marshall Inc.
Absorption Costing Income Statement
For the Month Ending October 31
40,000 Units Manufactured
$ ✓
3,600,000
$ ✓
2,280,000
2,280,000
$ ✓
1,320,000
50,000 Units Manufactured
$ ✓
3,600,000
$ √
2,820,000
564,000
$ ✓
2,256,000
$ ✓
1,344,000](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F3717f9df-8e3e-4fb1-bc0e-e458f495caa3%2F811acf63-1ecc-4886-b86c-5a24bb8d07cb%2Fauhlw9s_processed.png&w=3840&q=75)
Transcribed Image Text: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 (40,000 x $90)
$3,600,000
Manufacturing costs (40,000 units):
Direct materials
Direct labor
Variable factory overhead
Fixed factory overhead
Fixed selling and administrative expenses
Variable selling and administrative expenses
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.
Sales
Cost of goods sold:
Cost of goods manufactured
Inventory, October 31
Total cost of goods sold
Gross profit
✓
✓
✓
1,440,000
480,000
240,000
120,000
75,000
200,000
Marshall Inc.
Absorption Costing Income Statement
For the Month Ending October 31
40,000 Units Manufactured
$ ✓
3,600,000
$ ✓
2,280,000
2,280,000
$ ✓
1,320,000
50,000 Units Manufactured
$ ✓
3,600,000
$ √
2,820,000
564,000
$ ✓
2,256,000
$ ✓
1,344,000
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