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 55,000 to 95,000 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 85,000 units during the year at a selling price of $9.90 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 55,000 75,000 95,000 $ 159,500 450,000 609,500 $ Total costs: Variable cost Fixed cost Total costs Cost per unit: Variable cost Fixed cost Total cost per unit Required 1 Required 2 >

Answer 1

1.

	Units Produced and Sold
	55,000	75,000	95,000
Total costs:
Variable costs	159500	217500	275500
Fixed costs	450000	450000	450000
Total costs:	609500	667500	725500
Cost per unit:
Variable cost	2.90	2.90	2.90
Fixed cost	8.18	6.00	4.74
Total cost per unit	11.08	8.90	7.64

Working:

	Units Produced and Sold
	55000	75000	95000
Total costs:
Variable costs	159500	=75000*2.9	=95000*2.9
Fixed costs	450000	450000	450000
Total costs:	609500	=217500+450000	=275500+450000
Cost per unit:
Variable cost	=159500/55000	2.9	2.9
Fixed cost	=450000/55000	=450000/75000	=450000/95000
Total cost per unit	=2.9+8.18	=2.9+6	=2.9+4.74

2.

Harris Company
Contribution Format Income Statement
Sales revenue (85000 x $9.90)	841500
Variable costs (85000 x $2.90)	246500
Contribution margin	595000
Fixed costs	450000
Net income	145000