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On November 30, the end of the first month of operations, Weatherford Company prepared the following income statement, based on the absorption costing concept: Weatherford Company Absorption Costing Income Statement For the Month Ended November 30 $3,920,000.00 1 Sales (28,000 units) 2 Cost of goods sold: 3 Cost of goods manufactured (32,600 units) Inventory, November 30(4,600 units) Total cost of goods sold 6 Gross profit 7 Selling and administrative expenses $2,608,000.00 (368,000.00) 4 5 2,240,000.00 $1,680,000.00 175,000.00 8 Income from operations $1,505,000.00 Variable Costing Income Statement For the Month Ended November 30 1 Sales $3,920,000.00 3 2 Variable cost of goods sold: Variable cost of goods manufactured Inventory, November 30 4 5 6 Manufacturing margin 7 Variable selling and administrative expenses 8 Contribution margin 9 Fixed costs: 10 Fixed manufacturing costs Fixed selling and administrative expenses 11 12 Total fixed costs 13 Income from operations UUUUUS rior to the first month of operations ending October 31, Marshall Inc. estimated the following operating results: 1 Sales (28,800 $75) $2,160,000.00 2 Manufacturing costs (28,800 units): 3 Direct materials 1,209,600.00 4 Direct labor 316,800.00 5 172,800.00 241,920,00 Variable factory overhead 6 Fixed factory overhead Fixed selling and administrative expenses 8 Variable selling and administrative expenses 7 29,200.00 35,000.00 The company is evaluating a proposal to manufacture 36,000 units instead of 28,800 units, thus creating an ending inventory of 7,200 units. Manufacturing the additional units will not change sales, unit variable factory overhead costs, total fixed factory overhead cost, or total seling administrative expenses. Score: 43/95 Marshall Inc. Absorption Costing Income Statement For the Month Ending October 31 28,800 Units Manufactured 36,000 Units Manufactured 2 Sales 3 Cost of goods sold: 4 I 5 6 Cost of goods manufactured Inventory, October 31 Total cost of goods sold 7 Gross profit # Selling and administrative expenses 9 Income from operations