Answer the following questions please.

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 (20,000 x $71) $1,420,000 Manufacturing costs (20,000 units): Direct materials 852,000 Direct labor 202,000 Variable factory overhead 94,000 Fixed factory overhead 112,000 Fixed selling and administrative expenses 30,500 Variable selling and administrative expenses 36,800 The company is evaluating a proposal to manufacture 22,400 units instead of 20,000 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. The company is evaluating a proposal to manufacture 22,400 units instead of 20,000 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 20,000 and 22,400 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 20,000 Units Manufactured 22,400 Units Manufactured Sales 1,420,000 $ 1,420,000 Cost of goods sold: Cost of goods manufactured Inventory, October 31 Total cost of goods sold $ Fixed selling and administrative expenses $ $ a. 2. Prepare an estimated income statement, comparing operating results if 20,000 and 22,400 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 20,000 Units Manufactured 22,400 Units Manufactured Variable cost of goods sold: $1 $ $ $ DO00000000 ID000000000 Fixed costs:| Total fixed costs $1 $ b. What is the reason for the difference in operating income reported for the two levels of production by the absorption costing income statement? number The increase in income from operations under absorption costing is caused by the allocation of overhead cost over a of units. Thus, the cost of goods sold is . The difference can also be explained by the amount of inventory. overhead cost included in the