Question

Check my work 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 30,000 to 50,000 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 45,000 units during the year at a selling price of $16 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 releva variable cost and fixed cost to 2 decimal places.) Units Produced and Sold 30,000 40,000 50,000 Total cost Variable cost $ 180,000 Fixed cost 300,000 Total cost S 480,000 $ Cost per unit Variable cost <prev 60, 10 İİ Next >

Answer 1

1	Units produced and sold
		30000	40000	50000
	Total cost
	Variable cost	$ 1,80,000	$       2,40,000	$       3,00,000
	Fixed cost per year	$ 3,00,000	$       3,00,000	$       3,00,000
	Total costs	$ 4,80,000	$       5,40,000	$       6,00,000
	Costs per unit
	Variable cost per unit	$         6.00	$               6.00	$               6.00
	Fixed cost per unit	$       10.00	$               7.50	$               6.00
	Total cost per unit	$       16.00	$             13.50	$             12.00
	Workings:
	30000 units
	Variable cost per unit	=	$180000 /30000 units
		=	$               6.00
	Fixed cost per unit	=	$300000 /30000 units
		=	$             10.00
	40000 units
	Total Variable cost	=	40000 units X $6
		=	$       2,40,000
	Fixed cost per unit	=	$300000 /40000 units
		=	$               7.50
	50000 units
	Total Variable cost	=	50000 units X $6
		=	$       3,00,000
	Fixed cost per unit	=	$300000 /50000 units
		=	$               6.00
	Note: Fixed cost per year will remain same irrespective of number units whereas it will change in case of Fixed cost per unit also Variable cost per unit will remain same and it will change in total.
2	Contribution format Income statement
	Units produced and sold	45000
(a)	Sales (45000 units X $16)	$ 7,20,000
Less:	Variable cost (45000 units X $6)	$ 2,70,000
(b)	Total contribution margin	$ 4,50,000
Less:	Fixed cost per year	$ 3,00,000
	Net operating Income (loss)	$ 1,50,000