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Hough Company manufactures and sells a single product. A partially completed schedule of the companys total and per unit cos
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Answer #1
Requirement 1
Units produced and sold
80,000 100,000 120,000
Total costs:
Variable Costs $240,000 (100,000x3) $300,000 (120,000x3) $360,000
Fixed Costs 320,000 320,000 320,000
Total Costs $560,000 $620,000 $680,000
Cost per unit:
Variable Cost (240,000/80,000) 3.00 (300,000/100,000) 3.00 (300,000/120,000) 3.00
Fixed Cost (320,000/80,000) 4.00 (320,000/100,000) 3.20 (320,000/120,000) 2.67
Total cost per unit 7.00 6.20 5.67
Requirement 2
Income statement for the year
Sales (110,000*6.5) 715,000
Variable costs (110,000*3) 330,000
Contribution 385,000
Fixed costs 320,000
Net Income 65,000
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