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Question 36 Basic Electric Motors is a division of Basic Electric 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 200,000 units for $7 per unit. Ester Madden is the division manager. She is considering producing either 200,000 or 270,000 units during the period. Other information is as follows: Division Information for 2020 Beginning inventory 0 Expected sales in units 200,000 Selling price per unit $7 Variable manufacturing cost per unit $2.30 Fixed manufacturing cost (total) $540,000 Fixed manufacturing overhead costs per unit Based on 200,000 units $2.70 per unit ($540,000 : 200,000) Based on 270,000 units $2.00 per unit ($540,000 + 270,000) Manufacturing cost per unit Based on 200,000 units $5.00 per unit ($2.30 variable + $2.70 fixed) Based on 270,000 units $4.30 per unit ($2.30 variable + $2.00 fixed) Variable selling and administrative expenses $0.30 per unit Fixed selling and administrative expenses (total) $10,800(a) Prepare an absorption-costing income statement, with one column showing the results if 200,000 units are produced and one column showing the results if 270,000 units are produced. BASIC ELECTRIC MOTORS DIVISION Income Statement For the Year Ended 2020 Absorption Costing Units produced 270,000 200,000 Units sold V v v Attempts: 0 of 2 used