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ACC349 Week 3 P7-3A Basic Electric Motors is a division of Basic Electric Products Corporation

Price: $2.50


Basic Electric Motors is a division of Basic Electric Products Corporation. The
division manufactures and sells an electric motor used in a wide variety of applications.
During the coming year it expects to sell 50,000 units for $30 per unit. Esther Madonna
is the division manager. She is considering producing either 50,000 or 80,000 units during
the period. Other information is presented in the schedule.


Instructions
(a) Prepare an absorption costing income statement, with one column showing the results
if 50,000 units are produced and one column showing the results if 80,000 units are produced.
(b) Prepare a variable costing income statement, with one column showing the results
if 50,000 units are produced and one column showing the results if 80,000 units are produced.

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