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Electricoil Meier

Price: $2.50


Electricoil is a division of Meier Products Corporation. The division manufactures
and sells an electric coil used in a wide variety of applications. During the coming year, it
expects to sell 200,000 units for $9 per unit. Mark Barnes is the division manager. He is
considering producing either 200,000 or 250,000 units during the period. Other information
is presented in the schedule.

Division Information for 2014
Beginning inventory   -  
Expected sales in units   200,000
Selling price per unit   9
Variable manufacturing costs per unit   3
Fixed manufacturing overhead costs (total)   500,000


Instructions
(a) Prepare an absorption costing income statement, with one column showing the results
if 200,000 units are produced and one column showing the results if 250,000 units are
produced.
(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 250,000 units are
produced.

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