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 180,000 units for $7 per unit. Ester Madden is the division manager. She is considering producing either 180,000 or 300,000 units during the period. Other information is as follows: Division Information for 2020 Beginning inventory 0 Expected sales in units 180,000 Selling price per unit $7 Variable manufacturing cost per unit $2.10 Fixed manufacturing cost (total) $540,000 Fixed manufacturing overhead costs per unit Based on 180,000 units $3.00 per unit ($540,000 = 180,000) Based on 300,000 units $1.80 per unit ($540,000 = 300,000) Manufacturing cost per unit Based on 180,000 units $5.10 per unit ($2.10 variable + $3.00 fixed) Based on 300,000 units $3.90 per unit ($2.10 variable + $1.80 fixed) Variable selling and administrative expenses $0.50 per unit Fixed selling and administrative expenses (total) $10,500 v (a) Prepare an absorption-costing income statement, with one column showing the results if 180,000 units are produced and one column showing the results if 300,000 units are produced. BASIC ELECTRIC MOTORS DIVISION Income Statement For the Year Ended 2020 v (a) Prepare an absorption-costing income statement, with one column showing the results if 180,000 units are produced and one column showing the results if 300,000 units are produced. BASIC ELECTRIC MOTORS DIVISION Income Statement For the Year Ended 2020 Absorption Costing 300,000 Units produced 180,000 Units sold v (a) Prepare an absorption-costing income statement, with one column showing the results if 180,000 units are produced and one column showing the results if 300,000 units are produced. BASIC ELECTRIC MOTORS DIVISION Income Statement For the Year Ended 2020 Absorption Costing 300,000 Units produced 180,000 Units sold Sales Net income Fixed costs Variable costs Gross profit Cost of goods sold Contribution margin (a) Prepare an absorption-costing income statement, with one column showing the results if 180,000 units are produced and one column showing the results if 300,000 units are produced. BASIC ELECTRIC MOTORS DIVISION Income Statement For the Year Ended 2020 Absorption Costing 300,000 Units produced 180,000 Units sold Add Less (a) Prepare an absorption-costing income statement, with one column showing the results if 180,000 units are produced and one column showing the results if 300,000 units are produced. BASIC ELECTRIC MOTORS DIVISION Income Statement For the Year Ended 2020 Absorption Costing 300,000 Units produced 180,000 Units sold Cost of goods sold Variable costs Contribution margin Fixed costs Gross profit Sales Net income (a) Prepare an absorption-costing income statement, with one column showing the results if 180,000 units are produced and one column showing the results if 300,000 units are produced. BASIC ELECTRIC MOTORS DIVISION Income Statement For the Year Ended 2020 Absorption Costing 300,000 Units produced 180,000 Units sold Contribution margin Cost of goods sold Net income Fixed costs Variable costs Sales Gross profit Attempts: 0 of 2 used SAVE FOR LATER SUBMIT ANSWER v (a) Prepare an absorption-costing income statement, with one column showing the results if 180,000 units are produced and one column showing the results if 300,000 units are produced. BASIC ELECTRIC MOTORS DIVISION Income Statement For the Year Ended 2020 Absorption Costing Units produced 300,000 180,000 Units sold Add Less (a) Prepare an absorption-costing income statement, with one column showing the results if 180,000 units are produced and one column showing the results if 300,000 units are produced. BASIC ELECTRIC MOTORS DIVISION Income Statement For the Year Ended 2020 Absorption Costing 300,000 Units produced 180,000 Units sold Cost of goods sold Beginning inventory Ending inventory Volume variance Costs of goods manufactured Goods available for sale Selling and administrative expenses Attempts: 0 of 2 used SAVE FOR LATER SUBMIT ANSWER (a) Prepare an absorption-costing income statement, with one column showing the results if 180,000 units are produced and one column showing the results if 300,000 units are produced. BASIC ELECTRIC MOTORS DIVISION Income Statement For the Year Ended 2020 Absorption Costing 300,000 Units produced 180,000 Units sold Cost of goods sold Beginning inventory Ending inventory Volume variance Costs of goods manufactured Goods available for sale Selling and administrative expenses Attempts: 0 of 2 used SAVE FOR LATER SUBMIT ANSWER Fixed selling and administrative expenses (total) $10,500 v (a) Prepare an absorption-costing income statement, with one column showing the results if 180,000 units are produced and one column showing the results if 300,000 units are produced. BASIC ELECTRIC MOTORS DIVISION Income Statement For the Year Ended 2020 Absorption Costing 300,000 Units produced 180,000 Units sold Attempts: 0 of 2 used SAVE FOR LATER SUBMIT ANSWER Contribution margin Gross profit Net income Fixed costs Variable costs Cost of goods sold Sales Viley & Sons, Inc. All Rights Reserved. A Division of John Wiley & Sons, Inc. Version 4.24.21