FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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(a)
Prepare an absorption-costing income statement, with one column showing the results if 210,000 units are produced and one
column showing the results if 240,000 units are produced.
Units produced
Units sold
WILDHORSEMOTORS DIVISION
Income Statement
For the Year Ended 2022
Absorption Costing
$
$
240,000
$
210,000
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Transcribed Image Text:(a) Prepare an absorption-costing income statement, with one column showing the results if 210,000 units are produced and one column showing the results if 240,000 units are produced. Units produced Units sold WILDHORSEMOTORS DIVISION Income Statement For the Year Ended 2022 Absorption Costing $ $ 240,000 $ 210,000
Wildhorse Motors is a division of Wildhorse 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 210,000 units for $8.00 per unit. Nancy Jackson is the division
manager. She is considering producing either 210,000 or 240,000 units during the period. Other information is as follows:
Division Information for 2022
0
Beginning inventory
Expected sales in units
Selling price per unit
Variable manufacturing cost per unit
Fixed manufacturing cost (total)
Fixed manufacturing overhead costs per unit
Based on 210,000 units
Based on 240,000 units
Manufacturing cost per unit
Based on 210,000 units
Based on 240,000 units
Variable selling and administrative expenses
Fixed selling and administrative expenses (total)
210,000
$8.00
$2.30
$504,000
$2.40 per unit ($504,000 ÷ 210,000)
$2.10 per unit ($504,000 ÷ 240,000)
$4.70 per unit ($2.30 variable + $2.40 fixed)
$4.40 per unit ($2.30 variable + $2.10 fixed)
$0.35 per unit
$12,000
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Transcribed Image Text:Wildhorse Motors is a division of Wildhorse 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 210,000 units for $8.00 per unit. Nancy Jackson is the division manager. She is considering producing either 210,000 or 240,000 units during the period. Other information is as follows: Division Information for 2022 0 Beginning inventory Expected sales in units Selling price per unit Variable manufacturing cost per unit Fixed manufacturing cost (total) Fixed manufacturing overhead costs per unit Based on 210,000 units Based on 240,000 units Manufacturing cost per unit Based on 210,000 units Based on 240,000 units Variable selling and administrative expenses Fixed selling and administrative expenses (total) 210,000 $8.00 $2.30 $504,000 $2.40 per unit ($504,000 ÷ 210,000) $2.10 per unit ($504,000 ÷ 240,000) $4.70 per unit ($2.30 variable + $2.40 fixed) $4.40 per unit ($2.30 variable + $2.10 fixed) $0.35 per unit $12,000
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