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 selling and administrative expenses.

Required:

A.

Prepare an estimated income statement, comparing operating results if 28,800 and 36,000 units are manufactured in (1) the absorption costing format and (2) the variable costing format. Refer to the lists of Labels and Amount Descriptions for the exact wording of the answer choices for text entries. Be sure to complete the statement heading. Less, Plus or colons (:) will automatically appear if required.

B.

What is the reason for the difference in income from operations reported for the two levels of production by the absorption costing income statement? -Prepare an estimated income statement, comparing operating results if 28,800 and 36,000 units are manufactured in the absorption costing format. Refer to the lists of Labels and Amount Descriptions for the exact wording of the answer choices for text entries. Be sure to complete the statement heading. Less, Plus or colons (:) will automatically appear if required. -Prepare an estimated income statement, comparing operating results if 28,800 and 36,000 units are manufactured in the variable costing format. Refer to the lists of Labels and Amount Descriptions for the exact wording of the answer choices for text entries. Be sure to complete the statement heading. Less, Plus or colons (:) will automatically appear if required.

Instructions Prior to the first month of operations ending July 31, 2016, Muzenski Industries Inc. estimated the following operating results 2304,000.00 1 Sales (28,800 $80) 2Manufacturing costs (28,800 units): 3 Direct materials 4 Direct labor s Variable factory overhead 1,267.200.00 316,800.00 172,800.00 221,760.00 28,800.00 35,800.00 Fixed factory overhead 7 Fixed selling and administrative expenses 8Variable selling and administrative expenses The company is evaluating a proposal to manufacture 36,000 units instead of 28,800 units, thus creating an ending inventory of 7.20 additional units will not change sales, unit variable factory overnead costs, total fixed factory overhead cost, or total selling and admin Required: A Prepare an estimated income statement, comparing operating results if 28,800 and 36,000 units are manufactured in () the format and (2) the variable costing format Refer to the lists of Labels and Amount Descriptions for the exact text entries Be sure to complete the statement heading Less Plus or colons ( will automaticaly appear f requred Check My Work 3 more Check My Work uses remaining