P20-88 Bestil is a division of Meer Products Corporation. The vision manufactures and set an electric coll used in a wide variety of applications. During the coming year expects 200.000 units for $9 perni Mark Bames is the division manager. He is considering producing the 200.000 250.000 units during the period. Other information is presented in the schedule Revision Interation for 2017 Beginning inventory Expected in units Selling price per unit 200.000 $500.000 $2.50 per un 550.000 200 000) $200 per unit ($500,000.250 000) Variable manufacturing costs per unit Fixed manufacturing overhead costs (total) Fixed manufacturing overhead costs per unit Based on 200 units Based on 250 units Manufacturing costs per unit Based on 200 units Based on 250 units Variable selling and administrative expense Flued selling and administrative expense (total) $5.50 per unit (3 variabile $2.50 fixed) $5.00 per unit ($3 variable. $200 fixed) $0.40 $15.000 Instructions (a) Prepare an absorption costing income statement with one column showing the results 200 units are produced and one column showing the results 250,000 units are produced (b) Prepare a variable costing income statement with one column showing the results if 200,000 units are produced and one column showing the results 250,000 units produced le) Reconcile the differences in net incomes under the two approaches and explain what accounts for this difference Die hodo b o come the b ig BELOW PROBLEM 20-8B ELECTRICOIL DIVISION Income Statement For the Year Ended December 31, 2017 Absorption Costing 200,000 Produced 250,000 Produced Sales uns 39 1.800.000 1.800.000 Cost of goods sold Gross profit Var siling Admin expenses Exd selling Admin expenses Net Income Note that ALES emain the same in BOTH trying to show the Inventory makes between costing PROBLEM 20-8B ELECTRICOIL DIVISION Income Statement For the Year Ended December 31, 2017 Absorption Costing 200,000 Produced 250,000 Produced Sales 39 1.800.000 1.800.000 Cost of goods sold SALES em the same BOTNC Gross pro Varsling Admin The problem trying to show the difference Ending inventorymas between costing Todelling & Admin Net Income ELECTRICOIL DIVISION Income Statement For the Year Ended December 31, 2017 Variable Costing 200,000 Produced 1,800,000 250,000 Produced 1.800.000 Sales units $9) Contribution margin Net Income Don't forget this: (see answers below for help