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 70,000 to 110,000 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 100,000 units during the year at a selling price of $7.80 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 70,000 90,000 110,000 $ 196,000 360.000 556,000 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
	70,000	90,000	110,000
Total costs:
Variable cost	$196,000	$252,000 (90,000*$2.8)	$308,000 (110,000*$2.8)
Fixed cost	360,000	360,000	360,000
Total costs	$556,000
Cost per unit:
Variable cost	$2.8 (196,000/70,000)	$2.8	$2.8
Fixed cost	5.14 (360,000/70,000)	4 (360,000/90,000)	3.27 (360,000/110,000)
Total cost per unit	$7.94	$6.8	$6.07

2.

Harris Company Contribution Format Income Statement
Sales (100,000*$7.80)	$780,000
Variable cost (100,000*$2.8)	280,000
Contribution margin	500,000
Fixed cost	360,000
Operating income	$140,000