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 $8 per unit. Ester Madden is the division manager. She is considering producing either 200,000 or 240,000 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 $8 Variable manufacturing cost per unit $2.20 Fixed manufacturing cost (total) $480,000 Fixed manufacturing overhead costs per unit Based on 200,000 units $2.40 per unit ($480,000 - 200,000) Based on 240,000 units $2.00 per unit ($480,000 = 240,000) Manufacturing cost per unit Based on 200,000 units $4.60 per unit ($2.20 variable + $2.40 fixed) Based on 240,000 units $4.20 per unit ($2.20 variable + $2.00 fixed) Variable selling and administrative expenses $0.30 per unit Fixed selling and administrative expenses (total) $11,200 (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 if 240,000 units are produced. BASIC ELECTRIC MOTORS DIVISION Income Statement For the Year Ended 2020 Variable Costing 240,000 Units produced 200,000 Units sold 200000 200000 Sales 1600000 1600000 $ $ Less Variable costs Variable cost of goods sold Variable selling and administrative expenses Contribution margin Less Fixed costs Fixed manufacturing overhead Fixed selling and administrative expenses Net income $