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a. 2. Prepare an estimated income statement, comparing operating results if 40,000 and 50,000 units are manufactured in the variable costing format. If an amount box does not require an entry leave it blank. 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: Marshall Inc. Variable Costing Income Statement For the Month Ending October 31 40,000 Units Manufactured Fixed factory overhead ✓ 3,600,000 $ √ 2,160,000 $ √ 2,160,000 $ √ 1,440,000 200,000 $ √ 1,240,000 120,000 $X $ √ 2,700,000 540,000 $ X $ X 50,000 Units Manufactured X $ X 120,000

a. 2. Prepare an estimated income statement, comparing operating results if 40,000 and 50,000 units are manufactured in the variable costing format. If an amount box does not require an entry leave it blank. 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: Marshall Inc. Variable Costing Income Statement For the Month Ending October 31 40,000 Units Manufactured Fixed factory overhead ✓ 3,600,000 $ √ 2,160,000 $ √ 2,160,000 $ √ 1,440,000 200,000 $ √ 1,240,000 120,000 $X $ √ 2,700,000 540,000 $ X $ X 50,000 Units Manufactured X $ X 120,000

Managerial Accounting
Managerial Accounting
15th Edition
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:Carl Warren, Ph.d. Cma William B. Tayler
Chapter7: Variable Costing For Management analysis
Section: Chapter Questions
Problem 8E: Estimated income statements, using absorption and variable costing Prior to the first month of...
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Operating income Sales a. 2. Prepare an estimated income statement, comparing operating results if 40,000 and 50,000 units are manufactured in the variable costing format. If an amount box does not require an entry leave it blank. 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: $ ✓ 1,045,000 Fixed factory overhead Marshall Inc. Variable Costing Income Statement For the Month Ending October 31 40,000 Units Manufactured $ ✓ 3,600,000 $ ✓ 2,160,000 $ ✓ 2,160,000 $ ✓ 1,440,000 200,000 $ ✓ 1,069,000 1,240,000 $ ✓ 120,000 $ X $ ✓ 2,700,000 540,000 $ X $ X 50,000 Units Manufactured X $ X $ ✓ 120,000
Transcribed Image Text:Operating income Sales a. 2. Prepare an estimated income statement, comparing operating results if 40,000 and 50,000 units are manufactured in the variable costing format. If an amount box does not require an entry leave it blank. 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: $ ✓ 1,045,000 Fixed factory overhead Marshall Inc. Variable Costing Income Statement For the Month Ending October 31 40,000 Units Manufactured $ ✓ 3,600,000 $ ✓ 2,160,000 $ ✓ 2,160,000 $ ✓ 1,440,000 200,000 $ ✓ 1,069,000 1,240,000 $ ✓ 120,000 $ X $ ✓ 2,700,000 540,000 $ X $ X 50,000 Units Manufactured X $ X $ ✓ 120,000
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 (40,000 x $90) $3,600,000 Manufacturing costs (40,000 units): Direct materials Direct labor Variable factory overhead Fixed factory overhead Fixed selling and administrative expenses Variable selling and administrative expenses The company is evaluating a proposal to manufacture 50,000 units instead of 40,000 units, thus creating an ending inventory of 10,000 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 40,000 and 50,000 units are manufactured in the absorption costing format. If an amount box does not require an entry leave it blank. Sales Cost of goods sold: Cost of goods manufactured Inventory, October 31 Total cost of goods sold Gross profit ✓ ✓ ✓ 1,440,000 480,000 240,000 120,000 75,000 200,000 Marshall Inc. Absorption Costing Income Statement For the Month Ending October 31 40,000 Units Manufactured $ ✓ 3,600,000 $ ✓ 2,280,000 2,280,000 $ ✓ 1,320,000 50,000 Units Manufactured $ ✓ 3,600,000 $ √ 2,820,000 564,000 $ ✓ 2,256,000 $ ✓ 1,344,000
Transcribed Image Text: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 (40,000 x $90) $3,600,000 Manufacturing costs (40,000 units): Direct materials Direct labor Variable factory overhead Fixed factory overhead Fixed selling and administrative expenses Variable selling and administrative expenses The company is evaluating a proposal to manufacture 50,000 units instead of 40,000 units, thus creating an ending inventory of 10,000 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 40,000 and 50,000 units are manufactured in the absorption costing format. If an amount box does not require an entry leave it blank. Sales Cost of goods sold: Cost of goods manufactured Inventory, October 31 Total cost of goods sold Gross profit ✓ ✓ ✓ 1,440,000 480,000 240,000 120,000 75,000 200,000 Marshall Inc. Absorption Costing Income Statement For the Month Ending October 31 40,000 Units Manufactured $ ✓ 3,600,000 $ ✓ 2,280,000 2,280,000 $ ✓ 1,320,000 50,000 Units Manufactured $ ✓ 3,600,000 $ √ 2,820,000 564,000 $ ✓ 2,256,000 $ ✓ 1,344,000
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