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) $2,329,600 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. 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 Marshall Inc. Absorption Costing Income Statement For the Month Ending October 31 25,600 Units Manufactured Sales $ 2,329,600 Cost of goods sold: Cost of goods manufactured $ 2,071,040 Inventory, October 31 28,800 Units Manufactured 2,329,600 2,510,100 Total cost of goods sold 2,071,040 258,560 Gross profit Selling and administrative expenses 110,700 110,700 Operating income 147,860 Feedback 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. Marshall Inc. Variable Costing Income Statement For the Month Ending October 31 160 lt blank Marshall Inc. Variable Costing Income Statement For the Month Ending October 31 25,600 Units Manufactured 28,800 Units Manufactured Sales Variable cost of goods sold: Variable cost of goods manufactured Inventory, October 31 Total variable cost of goods sold Manufacturing margin Variable selling and administrative expenses Contribution margin Fixed costs: Fixed factory overhead Fixed selling and administrative expenses Total fixed costs Operating income