Basic Electric Motors is a division of Basic Electric Products Corporation. The division manufactures and sells an electric switch used in a wide variety of applications. During the coming year, it expects to sell 220,000 units for $8 per unit. Ester Madden is the division manager. She is considering producing either 220,000 or 270,000 units during the period. Other information is as follows: Division Information for 2020 Beginning inventory 0 Expected sales in units 220,000 Selling price per unit $8 Variable manufacturing cost per unit $2.70 Fixed manufacturing cost (total) $594,000 Fixed manufacturing overhead costs per unit Based on 220,000 units $2.70 per unit ($594,000 220,000) Based on 270,000 units $2.20 per unit ($594,000 270,000) Manufacturing cost per unit Based on 220,000 units $5.40 per unit ($2.70 variable + $2.70 fixed) Based on 270,000 units $4.90 per unit ($2.70 variable + $2.20 fixed) Variable selling and administrative expenses $0.50 per unit Fixed selling and administrative expenses (total) $11,900 Collapse question part (a) Prepare an absorption-costing income statement, with one column showing the results if 220,000 units are produced and one column showing the results if 270,000 units are produced.

Question 36 Basic Electric Motors is a division of Basic Electric Products Corporation. The division manufactures and sells an electric switch used in a wide variety of applications. During the coming year, it expects t the division manager. She is considering producing either 220,000 or 270,000 units during the period. Other information is as fol sell 220,000 units for $8 per unit. Ester Madden Division Information for 2020 Beginning inventory C Expected sales in units 220,000 Selling price per unit $8 Variable manufacturing cost per unit $2.70 Fixed manufacturing cost (total) $594,000 Fixed manufacturing overhead costs per unit Based on 220,000 units $2.70 per unit ($594,000220,000) $2.20 per unit ($594,000 270,000) Based on 270,000 units Manufacturing cost per unit Based on 220,000 units $5.40 per unit ($2.70 variable $2.70 fixed) Based on 270,000 units $4.90 per unit ($2.70 variable $2.20 fixed) Variable selling and administrative expenses $0.50 per unit Fixed selling and administrative expensess (total) $11,900 (a) Prepare an absorption-costing income statement, with one column showing the results if 220,000 units are produced and one column showing the results if 270,000 units are produced