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 51,000 to 91,000 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 81,000 units during the year at a selling price of $9.17 per unit. Prepare a contribution format income statement for the year.

variable cost and fixed cost to 2 decimal places.)

	Units Produced and Sold 51,000 71,000 91,000 Total costs: Variable costs $193,800 Fixed costs 310,000 Total costs $503,800 $0 $0 Cost per unit: Variable cost Fixed cost Total cost per unit $0.00 $0.00 $0.00

Answer 1

Requirement 1

	Units produced and sold
	51000	71000	91000
Total costs:
Variable costs	$ 1,93,800.00	$    2,69,800.00*	$   3,45,800.00
Fixed costs	$ 3,10,000.00	$    3,10,000.00	$   3,10,000.00
Total costs:	$ 5,03,800.00	$    5,79,800.00	$   6,55,800.00
Cost per unit
Variable costs	$                3.80**	$                   3.80	$                 3.80
Fixed costs	$                6.08	$                   4.37	$                 3.41
Total Cost per unit	$                9.88	$                   8.17	$                 7.21

*$193800/51000 x 71000

**$193800/51000

Requirement 2

Contribution margin income statement
Sales revenue	$ 7,42,770.00
Less: Variable cost (3.8 x 81000)	$ 3,07,800.00
Contribution margin	$ 4,34,970.00
Fixed cost	$ 3,10,000.00
Operating profit	$ 1,24,970.00