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 59,000 to 99,000 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.

	Units Produced and Sold 59,000 79,000 99,000 Total costs: Variable costs $159,300 Fixed costs 430,000 Total costs $589,300 Cost per unit: Variable cost Fixed cost Total cost per unit

2. Assume that the company produces and sells 89,000 units during the year at a selling price of $9.14 per unit. Prepare a contribution format income statement for the year.

	Harris Company Contribution Format Income Statement

Answer 1

1. Complete the schedule of the company’s total costs and costs per unit as given in the relevant tab below.

	Units Produced and Sold 59,000 79,000 99,000 Total costs: Variable costs $159,300 213300 267300 Fixed costs 430,000 430000 430000 Total costs $589,300 643300 697300 Cost per unit: Variable cost 159300/59000 = 2.7 2.7 2.7 Fixed cost 7.29 5.44 4.34 Total cost per unit 9.99 8.14 7.04

2. Assume that the company produces and sells 89,000 units during the year at a selling price of $9.14 per unit. Prepare a contribution format income statement for the year.

	Harris Company Contribution Format Income Statement Sales (89000*9.14) 813460 Variable cost 240300 Contribution margin 573160 Fixed cost 430000 Operating income 143160