LA d. Comment on the effects of production and sales on net income under the two costing approaches. *P6.8 (LO 5), An Writing Dilithium Batteries is a division of Enterprise pic. The division manufactures and sells a long-life battery used in a wide variety of applications. During the coming year, it expects to sell 60,000 units for 30 per unit. Nyota Uthura is the division manager. She is considering producing either 60,000 or 90,000 units during the period. Other information is presented in the schedule. Prepare absorption and variable costing income statements and reconcile differences between absorption and variable costing income statements when sales level and production level change. Discuss relative usefulness of absorption costing versus variable costing. 0 60,000 30 12 540,000 Division Information for 2020 Beginning inventory Expected sales in units Selling price per unit Variable manufacturing costs per unit Fixed manufacturing overhead costs (total) Fixed manufacturing overhead costs per unit: Based on 60,000 units Based on 90,000 units Manufacturing costs per unit: Based on 60,000 units Based on 90,000 units 9 per unit (540,000 - 60,000) 6 per unit (540,000 - 90,000) 21 per unit (12 variable + 9 fixed) 18 per unit (12 variable + 6 fixed) a My library Horngren's Cost Accou... Weygandt's Manageria... Contents a AA Based on 60,000 units 9 per unit (540,000 + 60,000) Based on 90,000 units 6 per unit (540,000 - 90,000) Manufacturing costs per unit: Based on 60,000 units 21 per unit (12 variable + 9 fixed) Based on 90,000 units 18 per unit (12 variable + 6 fixed) Variable selling and administrative expenses 2 Fixed selling and administrative expenses (total) 50,000 Instructions a. Prepare an absorption costing income statement, with one column showing the results if 60,000 units are produced and one column showing the results if 90,000 units are produced. 90,000 units: NI 550,000 b. Prepare a variable costing income statement, with one column showing the results if 60,000 units are produced and one column showing the results if 90,000 units are produced. 90,000 units: NI 370,000 c. Reconcile the difference in net incomes under the two approaches and explain what accounts for this difference. d. Discuss the relative usefulness of the variable costing income statements versus the absorption costing income statements for decision making and for evaluating the manager's performance. B