Question

unit over the relevant range of 50,000 to 90,000 units is given below. Required: 1. Complete the above schedule of the company's total costs and costs per unit. 2. Assume that the company produces and sells 80,000 units during the year at a selling price of $10.20 per unit. Prepare a contribution format income statement for the year. ped Complete this question by entering your answers in the tabs below. Required 1 Required 2 Complete the above schedule of the company's total costs and costs per unit. (Round the per unit variable cost and fixed cost to 2 decimal places.) Units Produced and Sold 50,000 70,000 90,000 $ es 160,000 420,000 580,000 / Total costs: Variable costs Fixed costs Total costs Cost per unit: Variable cost Fixed cost Total cost per unit $ 0 $ O 0.00 $ 0.00 $ 0.00 Required 2 >

Answer 1

Answer 1.)

Certain points that are to be considered beefore doing this question :

1. Variable cost per unit is constant and

2. Fixed cost in total is constant irrespective of units produced

Now , lets start this question ,

Units produced and sold

	50000	70000	90000
Total cost Variable cost Fixed cost	160000 420000	224000 420000	288000 420000
Total cost	580000	644000	708000
Cost per unit
Variable cost per unit	3.2	3.2	3.2
Fixed cost per unit	8.4*	6**	4.67***
Total cost per unit	11.6	9.20	7.87

*420000/50000 i.e Fixed cost/No. of units

**420000/70000 i.e Fixed cost/No. of units

***420000/90000 i.e Fixed cost/No. of units

Here , Variable cost per unit = Variable cost/No. of units

i.e Here at 50000 units , Variable cost per unit = 420000/50000 =3.2

Answer 2.)

	80000
Total cost Variable cost Fixed cost	256000 420000
Total cost	676000
Cost per unit
Variable cost per unit	3.2
Fixed cost per unit	5.25*
Total cost per unit	8.45

*420000/80000 =5.25