Estimated Income Statements, using Absorption and Variable Costing Prior to the first month of operations ending October

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Estimated Income Statements Using Absorption And Variable Costing Prior To The First Month Of Operations Ending October 1 (27.4 KiB) Viewed 35 times

Estimated Income Statements Using Absorption And Variable Costing Prior To The First Month Of Operations Ending October 2 (25.34 KiB) Viewed 35 times

Estimated Income Statements Using Absorption And Variable Costing Prior To The First Month Of Operations Ending October 3 (31.14 KiB) Viewed 35 times

Estimated Income Statements Using Absorption And Variable Costing Prior To The First Month Of Operations Ending October 4 (9.32 KiB) Viewed 35 times

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 (24,000 x $83) $1,992,000 Manufacturing costs (24,000 units): Direct materials 1,204,800 Direct labor 285,600 Variable factory overhead 132,000 Fixed factory overhead 158,400 Fixed selling and administrative expenses 43,100 Variable selling and administrative expenses 52,100 thus creating an ending inventory of 2,400 units. The company is evaluating a proposal to manufacture 26,400 units instead of 24,000 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 24,000 and 26,400 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 24,000 Units Manufactured 26,400 Units Manufactured Cost of goods sold: 111 000000 0000001
a. 2. Prepare an estimated income statement, comparing operating results if 24,000 and 26,400 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 24,000 Units Manufactured 26,400 Units Manufactured Variable cost of goods sold: Fixed costs: Total fixed costs 000000 0000 Q00000 googl
b. What is the reason for the difference in operating income reported for the two levels of production by the absorption costing income statement? The increase in income from operations under absorption costing is caused by the allocation of overhead cost over a The difference can also be explained by the number of units. Thus, the cost of goods sold is, overhead cost included in the amount of inventory.