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2. EX.21.08.ALGO (Algorithmic) Estimated Income Statements, using Absorption and Variable Costing Prior to the first...

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2. EX.21.08.ALGO (Algorithmic) 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 (28,800 x $101) $2,908,800 Manufacturing costs (28,800 units): Direct materials 1,751,040 Direct labor 414,720 Variable factory overhead 192,960 Fixed factory overhead 230,400 Fixed selling and administrative expenses 62,700 Variable selling and administrative expenses 75,800 The company is evaluating a proposal to manufacture 32,000 units instead of 28,800 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 28,800 and 32,000 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 28,800 Units Manufactured 32,000 Units Manufactured Cost of goods sold: $

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