Prepare an estimated income statement, comparing operating results if 23,200 and 25,600 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 23,200 Units Manufactured 25,600 Units Manufactured $fill in the blank 7615f5006068fad_2 $fill in the blank 7615f5006068fad_3 Cost of goods sold: $fill in the blank 7615f5006068fad_5 $fill in the blank 7615f5006068fad_6 fill in the blank 7615f5006068fad_8 fill in the blank 7615f5006068fad_9 $fill in the blank 7615f5006068fad_11 $fill in the blank 7615f5006068fad_12 $fill in the blank 7615f5006068fad_14 $fill in the blank 7615f5006068fad_15 fill in the blank 7615f5006068fad_17 fill in the blank 7615f5006068fad_18 $fill in the blank 7615f5006068fad_20 $fill in the blank 7615f5006068fad_21 a. 2. Prepare an estimated income statement, comparing operating results if 23,200 and 25,600 units are manufactured in the variable costing format. If an amount box does not require an entry leave it blank. Marshall Inc. Variable Costing Income Statement For the Month Ending October 31 23,200 Units Manufactured 25,600 Units Manufactured $fill in the blank 54058302407bffd_2 $fill in the blank 54058302407bffd_3 Variable cost of goods sold: $fill in the blank 54058302407bffd_5 $fill in the blank 54058302407bffd_6 fill in the blank 54058302407bffd_8 fill in the blank 54058302407bffd_9 $fill in the blank 54058302407bffd_11 $fill in the blank 54058302407bffd_12 $fill in the blank 54058302407bffd_14 $fill in the blank 54058302407bffd_15 fill in the blank 54058302407bffd_17 fill in the blank 54058302407bffd_18 $fill in the blank 54058302407bffd_20 $fill in the blank 54058302407bffd_21 Fixed costs: $fill in the blank 54058302407bffd_23 $fill in the blank 54058302407bffd_24 fill in the blank 54058302407bffd_26 fill in the blank 54058302407bffd_27 Total fixed costs $fill in the blank 54058302407bffd_28 $fill in the blank 54058302407bffd_29 $fill in the blank 54058302407bffd_31 $fill in the blank 54058302407bffd_32 b. What is the reason for the difference in operating income reported for the two levels of production by the absorption costing income statement?
Process Costing
Process costing is a sort of operation costing which is employed to determine the value of a product at each process or stage of producing process, applicable where goods produced from a series of continuous operations or procedure.
Job Costing
Job costing is adhesive costs of each and every job involved in the production processes. It is an accounting measure. It is a method which determines the cost of specific jobs, which are performed according to the consumer’s specifications. Job costing is possible only in businesses where the production is done as per the customer’s requirement. For example, some customers order to manufacture furniture as per their needs.
ABC Costing
Cost Accounting is a form of managerial accounting that helps the company in assessing the total variable cost so as to compute the cost of production. Cost accounting is generally used by the management so as to ensure better decision-making. In comparison to financial accounting, cost accounting has to follow a set standard ad can be used flexibly by the management as per their needs. The types of Cost Accounting include – Lean Accounting, Standard Costing, Marginal Costing and Activity Based Costing.
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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 (23,200 x $81) $1,879,200 Manufacturing costs (23,200 units): Direct materials 1,127,520 Direct labor 266,800 Variable factory overhead 125,280 Fixed factory overhead 148,480 Fixed selling and administrative expenses 40,400 Variable selling and administrative expenses 48,800 The company is evaluating a proposal to manufacture 25,600 units instead of 23,200 units, thus creating an ending inventory of 2,400 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 23,200 and 25,600 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 23,200 Units Manufactured 25,600 Units Manufactured $fill in the blank 7615f5006068fad_2 $fill in the blank 7615f5006068fad_3 Cost of goods sold: $fill in the blank 7615f5006068fad_5 $fill in the blank 7615f5006068fad_6 fill in the blank 7615f5006068fad_8 fill in the blank 7615f5006068fad_9 $fill in the blank 7615f5006068fad_11 $fill in the blank 7615f5006068fad_12 $fill in the blank 7615f5006068fad_14 $fill in the blank 7615f5006068fad_15 fill in the blank 7615f5006068fad_17 fill in the blank 7615f5006068fad_18 $fill in the blank 7615f5006068fad_20 $fill in the blank 7615f5006068fad_21 a. 2. Prepare an estimated income statement, comparing operating results if 23,200 and 25,600 units are manufactured in the variable costing format. If an amount box does not require an entry leave it blank.
Marshall Inc. Variable Costing Income Statement For the Month Ending October 31 23,200 Units Manufactured 25,600 Units Manufactured $fill in the blank 54058302407bffd_2 $fill in the blank 54058302407bffd_3 Variable cost of goods sold: $fill in the blank 54058302407bffd_5 $fill in the blank 54058302407bffd_6 fill in the blank 54058302407bffd_8 fill in the blank 54058302407bffd_9 $fill in the blank 54058302407bffd_11 $fill in the blank 54058302407bffd_12 $fill in the blank 54058302407bffd_14 $fill in the blank 54058302407bffd_15 fill in the blank 54058302407bffd_17 fill in the blank 54058302407bffd_18 $fill in the blank 54058302407bffd_20 $fill in the blank 54058302407bffd_21 Fixed costs: $fill in the blank 54058302407bffd_23 $fill in the blank 54058302407bffd_24 fill in the blank 54058302407bffd_26 fill in the blank 54058302407bffd_27 Total fixed costs $fill in the blank 54058302407bffd_28 $fill in the blank 54058302407bffd_29 $fill in the blank 54058302407bffd_31 $fill in the blank 54058302407bffd_32 b. What is the reason for the difference in operating income reported for the two levels of production by the absorption costing income statement?
The increase in income from operations under absorption costing is caused by the allocation of overhead cost over a number of units. Thus, the cost of goods sold is . The difference can also be explained by the amount of overhead cost included in the inventory.
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