Question

Exercise 1-11 Cost Behavior: Contribution Format Income Statement [L01-4, LO1-6 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 56,000 to 96,000 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 86,000 units during the year at a selling price of $8.61 per unit. Prepare a contribution format income statement for the year Complete this question by entering your answers in the tabs below. Required i Required 2 (Round the per unit Complete the schedule of the company's total costs and costs per unit as given in the relevant tab variable cost and fixed cost to 2 decimal places.) Units Produced and Sold 96,0 Total costs 168,000 Fixed cnsts K Prev 2 19 Next>

Answer 1

Required 1

	56,000 units	76,000 units	96,000 units
Total cost:
Variable cost	$168,000	$228,000	$288,000
Fixed cost	$350,000	$350,000	$350,000
Total cost	$518,000	$578,000	$638,000
Cost per unit
Variable cost	$3	$3	$3
Fixed cost	$6.25	$4.61	$3.65
Total cost per unit	$9.25	$7.61	$6.65

Working Notes

Variable cost (76,000 units) = $168,000*76,000/56,000

Variable cost (96,000 units) = $168,000*96,000/56,000

Variable cost per unit = (Variable cost /units)

Fixed cost per unit = (Fixed cost / units)

Required 2

​​​​​ Contribution Format income statement

Sales (86,000 units *$8.61)	$740,460
Variable cost ($168,000*86,000/56,000)	$(258,000)
Contribution margin	$482,460
Fixed expenses	$(350,000)
Net operating income	$132,460