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 (15,200 x $53) $805,600 Manufacturing costs (15,200 units): Direct materials 484,880 Direct labor 115,520 Variable factory overhead 53,200 Fixed factory overhead 63,840 Fixed selling and administrative expenses 17,400 Variable selling and administrative expenses 21,000 The company is evaluating a proposal to manufacture 16,800 units instead of 15,200 units, thus creating an ending inventory of 1,600 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. PLEASE DOUBLE-CHECK WHAT I HAVE FOR THE ENTRY. THANK YOU. Please show work.
Variance Analysis
In layman's terms, variance analysis is an analysis of a difference between planned and actual behavior. Variance analysis is mainly used by the companies to maintain a control over a business. After analyzing differences, companies find the reasons for the variance so that the necessary steps should be taken to correct that variance.
Standard Costing
The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on the various 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 (15,200 x $53) | $805,600 | |
| Manufacturing costs (15,200 units): | ||
| Direct materials | 484,880 | |
| Direct labor | 115,520 | |
| Variable factory |
53,200 | |
| Fixed factory overhead | 63,840 | |
| Fixed selling and administrative expenses | 17,400 | |
| Variable selling and administrative expenses | 21,000 |
The company is evaluating a proposal to manufacture 16,800 units instead of 15,200 units, thus creating an ending inventory of 1,600 units. Manufacturing the additional units will not change sales, unit variable
PLEASE DOUBLE-CHECK WHAT I HAVE FOR THE ENTRY. THANK YOU. Please show work.
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