Estimated Income Statements, using Absorption and Variable Costing Prior to the first month of operations ending January 31, Lemke Inc. estimated the following operating results: Sales (18,400 x $63) $1,159,200 Manufacturing costs (18,400 units): Direct materials 699,200 Direct labor 165,600 Variable factory overhead 77,280 Fixed factory overhead 92,000 Fixed selling and administrative expenses 25,000 Variable selling and administrative 30,300 expenses The company is evaluating a proposal to manufacture 20,000 units instead of 18,400 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. a. 1. Prepare an estimated income statement, comparing operating results if 18,400 and 20,000 units are manufactured in the absorption costing format. If an amount box does not require an entry leave it blank. Lemke Inc. Absorption Costing Income Statement For the Month Ending January 31 Line Item Description 18,400 Units 20,000 Units Manufactured Manufactured Sales $ 1,159,200 V $ 1,159,200 Cost of goods sold: Cost of goods manufactured $ 1,034,080 Inventory, January 31 X Total cost of goods sold Gross profit Selling and administrative expenses Operating incomea. 2. Prepare an estimated income statement, comparing operating results if 18,400 and 20,000 units are manufactured in the variable costing format. If an amount box does not require an entry leave it blank. Lemke Inc. Variable Costing Income Statement For the Month Ending January 31 Line Item Description 18,400 Units 20,000 Units Manufactured Manufactured 10 Variable cost of goods sold: Fixed costs: Total fixed costs