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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 (25,600 x $91) Manufacturing costs (25,600 units): Direct materials Direct labor Variable factory overhead Fixed factory overhead Fixed selling and administrative expenses Variable selling and administrative expenses $2,329,600 1,400,320 332,800 153,600 184,320 50,100 60,600 The company is evaluating a proposal to manufacture 28,800 units instead of 25,600 units, thus creating an ending inventory of 3,200 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.

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 (25,600 x $91) Manufacturing costs (25,600 units): Direct materials Direct labor Variable factory overhead Fixed factory overhead Fixed selling and administrative expenses Variable selling and administrative expenses $2,329,600 1,400,320 332,800 153,600 184,320 50,100 60,600 The company is evaluating a proposal to manufacture 28,800 units instead of 25,600 units, thus creating an ending inventory of 3,200 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.

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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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 (25,600 x $91) Manufacturing costs (25,600 units): Direct materials 1,400,320 Direct labor 332,800 Variable factory overhead 153,600 Fixed factory overhead 184,320 Fixed selling and administrative expenses 50,100 Variable selling and administrative expenses. 60,600 The company is evaluating a proposal to manufacture 28,800 units instead of 25,600 units, thus creating an ending inventory of 3,200 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. $2,329,600 a. 1. Prepare an estimated income statement, comparing operating results if 25,600 and 28,800 units are manufactured in the absorption costing format. If an amount box does not require an entry leave it blank. Marshall Inc. Absorption Costing Income Statement For the Month Ending October 31
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 (25,600 x $91) Manufacturing costs (25,600 units): Direct materials 1,400,320 Direct labor 332,800 Variable factory overhead 153,600 Fixed factory overhead 184,320 Fixed selling and administrative expenses 50,100 Variable selling and administrative expenses. 60,600 The company is evaluating a proposal to manufacture 28,800 units instead of 25,600 units, thus creating an ending inventory of 3,200 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. $2,329,600 a. 1. Prepare an estimated income statement, comparing operating results if 25,600 and 28,800 units are manufactured in the absorption costing format. If an amount box does not require an entry leave it blank. Marshall Inc. Absorption Costing Income Statement For the Month Ending October 31
Sales✔ Cost of goods sold: Cost of goods manufactured ✔ Inventory, October 31 ✓ Total cost of goods sold ✓ Gross profit ✔ Selling and administrative expenses ✔ Operating income ✔ blank. Marshall Inc. Absorption Costing Income Statement For the Month Ending October 31 25,600 Units Manufactured 2,329,600 ✔ Feedback Sales✔ Variable cost of goods sold: Variable cost of goods manufactured ✔ Fixed costs: Inventory, October 31✔ Total variable cost of goods sold ✔ Manufacturing margin ✔ Variable selling and administrative expenses✔ Contribution margin ✔ Total fixed costs Operating income ✓ 2,071,040 ✔ 0 ✓ a. 2. Prepare an estimated income statement, comparing operating results if 25,600 and 28,800 units are manufactured in the variable costing format. If an amount box does not require an entry leave it blank. 2,071,040 ✔ Marshall Inc. Variable Costing Income Statement For the Month Ending October 31 25 600 alte Fixed factory overhead ✔ Fixed selling and administrative expenses✔ 258,560 ✔ 110,700 Marshall Inc. Variable Costing Income Statement For the Month Ending October 31 147,860 ✓ 28,800 Units Manufactured 2,329,600 ✔ 25,600 Units Manufactured 2,510,100 X 110,700 28,800 Units Manufactured
Transcribed Image Text:Sales✔ Cost of goods sold: Cost of goods manufactured ✔ Inventory, October 31 ✓ Total cost of goods sold ✓ Gross profit ✔ Selling and administrative expenses ✔ Operating income ✔ blank. Marshall Inc. Absorption Costing Income Statement For the Month Ending October 31 25,600 Units Manufactured 2,329,600 ✔ Feedback Sales✔ Variable cost of goods sold: Variable cost of goods manufactured ✔ Fixed costs: Inventory, October 31✔ Total variable cost of goods sold ✔ Manufacturing margin ✔ Variable selling and administrative expenses✔ Contribution margin ✔ Total fixed costs Operating income ✓ 2,071,040 ✔ 0 ✓ a. 2. Prepare an estimated income statement, comparing operating results if 25,600 and 28,800 units are manufactured in the variable costing format. If an amount box does not require an entry leave it blank. 2,071,040 ✔ Marshall Inc. Variable Costing Income Statement For the Month Ending October 31 25 600 alte Fixed factory overhead ✔ Fixed selling and administrative expenses✔ 258,560 ✔ 110,700 Marshall Inc. Variable Costing Income Statement For the Month Ending October 31 147,860 ✓ 28,800 Units Manufactured 2,329,600 ✔ 25,600 Units Manufactured 2,510,100 X 110,700 28,800 Units Manufactured
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