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 Expected sales in units 180,000 Selling price per unit 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) Your answer is partially correct. Try again. 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. (a) Your answer is partially correct. Try again. 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 T 180000 T 180000 1260000 1260000 sales Less y cost of goods sold Gross profit 918000 702000 342000 558000 Less Selling and administrative expenses 90000 90000 Net income 252000 468000 Attempts: 1 of 2 used SAVE FOR LATER SUBMIT ANSWER (b) Prepare a variable-costing income statement, with one column showing the results if 180,000 units are produced and one column showing the results if 280,000 units are produced. BASIC ELECTRIC MOTORS DIVISION Income Statement For the Year Ended 2020 Variable Costing 280,000 180,000 Units produced Units sold 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 Expected sales in units 180,000 Selling price per unit 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) Your answer is partially correct. Try again. 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. (a) Your answer is partially correct. Try again. 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 T 180000 T 180000 1260000 1260000 sales Less y cost of goods sold Gross profit 918000 702000 342000 558000 Less Selling and administrative expenses 90000 90000 Net income 252000 468000 Attempts: 1 of 2 used SAVE FOR LATER SUBMIT ANSWER (b) Prepare a variable-costing income statement, with one column showing the results if 180,000 units are produced and one column showing the results if 280,000 units are produced. BASIC ELECTRIC MOTORS DIVISION Income Statement For the Year Ended 2020 Variable Costing 280,000 180,000 Units produced Units sold