Question

Harris Company manufactures and sells a single product. A partially completed schedule of the company's total costs and costs per unit over the relevant range of 53,000 to 93.000 units is given below. Required: 1. Complete the schedule of the company's total costs and costs per unit as given in the relevant tab below. 2. Assume that the company produces and sells 83.000 units during the year at a selling price of $10.45 per unit. Prepare a contribution format income statement for the year. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Complete the schedule of the company's total costs and costs per unit as given in the relevant tab below. (Round the per unit variable cost and fixed cost to 2 decimal places.) Units Produced and Sold 53,000 73,000 93,000 Total costs Variable costs Fored costs 137,800 500.000 Total costs 037,800 $ Coster unit Variable cost Food cost Total cost per 000 5 000 5 Required 23

Answer 1

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1	Units produced and sold
		53000	73000	93000
	Total cost
	Variable cost	$ 1,37,800	$       1,89,800	$       2,41,800
	Fixed cost per year	$ 5,00,000	$       5,00,000	$       5,00,000
	Total costs	$ 6,37,800	$       6,89,800	$       7,41,800
	Costs per unit
	Variable cost per unit	$         2.60	$               2.60	$               2.60
	Fixed cost per unit	$         9.43	$               6.85	$               5.38
	Total cost per unit	$       12.03	$               9.45	$               7.98
	Note: Fixed cost per year will remain same irrespective of number units whereas it will change in case of Fixed cost per unit also Variable cost per unit will remain same and it will change in total.
2
	Units produced and sold	83000
	Harris Company
	Contribution format Income statement
	Sales (83000 units X $10.45)	$ 8,67,350
Less:	Variable cost (83000 units X $2.60)	$ 2,15,800
	Total contribution margin	$ 6,51,550
Less:	Fixed cost per year	$ 5,00,000
	Net operating Income (loss)	$ 1,51,550

C D E Units produced and sold 53000 73000 93000 Total cost Variable cost 137800 =D2*D8 =E2*E8 Fixed cost per year 500000 =C5 =D5 Total costs =SUM(C4:05) =SUM(D4:05) =SUM(E4:E5) Costs per unit Variable cost per unit =C4/C2 =C8 =D8 Fixed cost per unit =C5/C2 =D5/D2 =E5/E2 Total cost per unit =SUM(C8:09) -SUM(08:09) =SUM(E8:59) 11 12 Note: Fixed cost per year will remain same irrespective of number units 13 14 2 15 Units produced and sold 83000 16 17 Harris Company 18 Contribution format Income statement Sales (83000 units X $10.45) C15*10.45 20 Less: Variable cost (83000 units X $2.60) =C15*C8 21 Total contribution margin =C19-C20 22 Less: Fixed cost per year =C5 23 Net operating Income (loss) =C21-C22 19