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

Variable Costing Income Statement On April 30, the end of the first month of operations, Joplin Company prepared the following income statement, based on the absorption costing concept: Joplin Company Absorption Costing Income Statement For the Month Ended April 30 Sales (6, 100 units) $201, 300 Cost of goods sold: Cost of goods manufactured (7, 100 units) $163,300 Inventory, April 30 (1,000 units) (23,000) Total cost of goods sold (140, 300) Gross profit $61,000 Selling and administrative expenses (36,830) Operating income $24, 170 If the fixed manufacturing costs were $ 44,091 and the fixed selling and administrative expenses were $18, 040, prepare an income statement according to the variable costing concept. Round all final answers to whole dollars. Joplin Company Variable Costing Income Statement For the Month Ended April 30 $Sales Variable cost of goods sold: $- Select - - Select - - Select - $- Select - - Select - $ - Select - Fixed costs: $Variable cost of goods sold Fixed…

At the end of the accounting period Tubman, Inc. reports operating income of $50,000, a contribution margin of $15, and a fixed overhead rate of $6 per unit. Under variable costing, if this company produces 100 more units of inventory, then operating income: a. will increase by $1,500 b. will decrease by $1,500 c. will increase by $900 d. will decrease by $900 e. will increase by $600 f. will decrease by $600 g. will not be affected h. Cannot be determined

A manufacturing company that produces a single product has provided the following data concerning its most recent month of operations: Selling price Units in beginning inventory Units produced Units sold Units in ending inventory Variable costs per unit: Direct materials Direct labor Variable manufacturing overhead Variable selling and administrative expense Fixed costs: Fixed manufacturing overhead Fixed selling and administrative expense 154 2,560 2,230 330 51 24 $. 15 16 $92,160 $11,150 The tegross margin for the month under absorption costing is: Multiple Chotce $62.440 S15.610, K Prev 4: of 10 Next > ere to search