Question
Bridgeport Motors is a division of Bridgeport Products Corporation. The division manufactures and sells an electric switch used in a wide variety of applications. During
Bridgeport Motors is a division of Bridgeport 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 210,000 units for $7.00 per unit. Sarah Allen is the division manager. She is considering producing either 210,000 or 240,000 units during the period. Other information is as follows:
Division Information for 2022 | ||||
Beginning inventory | 0 | |||
Expected sales in units | 210,000 | |||
Selling price per unit | $7.00 | |||
Variable manufacturing cost per unit | $2.20 | |||
Fixed manufacturing cost (total) | $504,000 | |||
Fixed manufacturing overhead costs per unit | ||||
Based on 210,000 units | $2.40 | per unit ($504,000 210,000) | ||
Based on 240,000 units | $2.10 | per unit ($504,000 240,000) | ||
Manufacturing cost per unit | ||||
Based on 210,000 units | $4.60 | per unit ($2.20 variable + $2.40 fixed) | ||
Based on 240,000 units | $4.30 | per unit ($2.20 variable + $2.10 fixed) | ||
Variable selling and administrative expenses | $0.40 | per unit | ||
Fixed selling and administrative expenses (total) | $10,300 |
Prepare a variable-costing income statement, with one column showing the results if 210,000 units are produced and one column showing the results if 240,000 units are produced.
BRIDGEPORTMOTORS DIVISION Income Statement For the Year Ended 2022 Variable Costing Units produced 240,000 210,000 Units sold $ $ $ > $ $ $
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