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 $9.57 per unit. Prepare a contribution format income statement for the year. Complete this question by entering your answers in the tabs below. Required Required 1 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 95,000 214,500 350,000 564,500 $ 0 $ 0 Total costs: Variable cost $ Fixed cost Total costs $ Cost per unit: Variable cost Fixed cost Total cost per unit) $ 0.00 $ 0.00 $ 0.00 Required 1 Required 2 >

Answer 1

Answer

Requirement 1

	55000	75000	95000
Total Cost
Variable cost	214500	292500	370500
Fixed cost	350000	350000	350000
Total Cost	564500	642500	720500
Cost per unit:
Variable cost	3.9	3.9	3.9
Fixed cost	6.364	4.667	3.684
Total Cost Per unit	10.264	8.567	7.584

Note :-

1) variable cost Per unit=$214500/55000=$3.9 Per Unit.Since per unit variable cost remains same therefore $3.9 x 75000/95000 will be applied .

2) Fixed cost in total remains same upto 95000 units as no imformation is given regarding fixed cost change. However if we divide same fixed cost in More units then fixed cost per unit will increase as $350000÷ 55000/75000/95000.

Requirement 2

Harris company

Contribution Format income statement

	85000 units
Particulars	Amount($)
Revenue @$9.57	813,450
Less:variable cost@$3.9	331,500
Contribution	481,950
Less :Fixed cost	350,000
Net income	131,950

Notes:- 1) Revenue =$9.57 x 85000 units = $813,450

2)Variable cost=$3.9 x 85000 units= $331,500

3) Fixed cost will remain same in Totality.

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