Bonita Motors is a division of Bonita 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 $ 8.00 per unit. Linda Williams is the division manager. She is considering producing either 220,000 or 260,000 units during the period. Other information is as follows:

Division Information for 2022
Beginning inventory		0
Expected sales in units		220,000
Selling price per unit		$ 8.00
Variable manufacturing cost per unit		$ 2.80
Fixed manufacturing cost (total)		$ 572,000
Fixed manufacturing overhead costs per unit
Based on 220,000 units		$ 2.60	per unit ($ 572,000 220,000)
Based on 260,000 units		$ 2.20	per unit ($ 572,000 260,000)
Manufacturing cost per unit
Based on 220,000 units		$ 5.40	per unit ($ 2.80 variable + $ 2.60 fixed)
Based on 260,000 units		$ 5.00	per unit ($ 2.80 variable + $ 2.20 fixed)
Variable selling and administrative expenses		$ 0.40	per unit
Fixed selling and administrative expenses (total)		$ 10,500

(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 260,000 units are produced.

BONITAMOTORS DIVISION Income Statement For the Year Ended 2022 Absorption Costing
Units produced		260,000		220,000
Units sold		enter a number of units		enter a number of units
select an income statement item Variable costsNet incomeSalesGross profitContribution marginSelling and administrative expensesCost of goods soldFixed costs		$ enter a dollar amount		$ enter a dollar amount
select between addition and deduction AddLess: select an income statement item Gross profitNet incomeContribution marginSalesFixed costsVariable costsSelling and administrative expensesCost of goods sold		enter a dollar amount		enter a dollar amount
select a summarizing line for the first part Contribution marginCost of goods soldFixed costsVariable costsNet incomeSalesGross profitSelling and administrative expenses		enter a total amount for the first part		enter a total amount for the first part
select between addition and deduction AddLess: select an income statement item Net incomeContribution marginVariable costsFixed costsSalesCost of goods soldSelling and administrative expensesGross profit		enter a dollar amount		enter a dollar amount
select a closing name for this statement Gross profitSalesContribution marginSelling and administrative expensesNet incomeFixed costsVariable costsCost of goods sold		$ enter a total amount for this statement		$ enter a total amount for this statement