P8.39B (LO 1, 2, 3) Harrison Pumps is a division of Liverpool Controls Corporation. The division manufactures and sells a pump that is used in a wide variety of applications. During the coming year, it expects to sell 60,000 units for $30 per unit. Imran Qureshi manages the division. He is considering producing either 60,000 or 90,000 units during the period. Other information is as follows: Prepare absorption- and variable-costing income statements, reconcile the differences between the two income statements when sales and production levels change, discuss the usefulness of the two approaches to costing $12 Division Information for 2020 Beginning inventory Expected sales in units 60,000 Selling price per unit $30 Variable manufacturing cost per unit Fixed manufacturing overhead cost $540,000 (total) Fixed manufacturing overhead costs per unit 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 cost per unit Based on 60,000 units Based on 90,000 units $21 per unit ($12 variable + $9 fixed) $18 per unit ($12 variable + $6 fixed) $2 per unit Variable selling and administrative expenses 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 causes this difference. d. Discuss the usefulness of variable-costing income statements versus the absorption-costing income statements for decision-making and for evaluating the manager's performance