Ivanhoe Motors is a division of Ivanhoe 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 $ 7.00 per unit. Debra King is the division manager. She is considering producing either 220,000 or 260,000 units during the period. Other information is as follows:

0 Division Information for 2022 Beginning inventory Expected sales in units 220,000 Selling price per unit $7.00 Variable manufacturing cost per unit $2.00 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 $4.60 per unit ($ 2.00 variable + $ 2.60 fixed) Based on 260,000 units $ 4.20 per unit ($ 2.00 variable + $ 2.20 fixed) Variable selling and administrative expenses $0.50 per unit Fixed selling and administrative expenses (total) $ 10,700 (a) Your answer is correct. 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. IVANHOEMOTORS DIVISION Income Statement For the Year Ended 2022 Absorption Costing Units produced 260,000 220,000 Units sold 220000 220000 Sales 1540000 $ 1540000 Less V: Cost of goods sold 924000 1012000 Gross profit 616000 528000 Less : Selling and administrative expenses 120700 120700 Net income $ 495300 407300 (b) Prepare a variable-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. IVANHOEMOTORS DIVISION Income Statement For the Year Ended 2022 Variable Costing Units produced 260,000 220.000 Units sold >