Question

Harris Company manufactures and sells a single product. Required: 1. A partially completed schedule of the company's total and per unit costs over the relevant range of 52,000 to 92,000 units produced and sold annually is given below: Complete the schedule of the company's total and unit costs. (Round the variable cost and fixed cost to 2 decimal places.) Units Produced and Sold 52,000 72,000 92,000 $ Total costs Variable costs Fixed costs Total costs Cost per unit: Variable cost Fixed cost 135,200 400,000 535,200 $ $ 0 $ 0 Total cost per unit S 0.00 $ 0.00 $ 0.00 2. Assume that the company produces and sells 82,000 units during the year at a selling price of $9.16 per unit. Prepare a contribution format income statement for the year. Harris Company Contribution Format Income Statement

Answer 1

1 Units Produced and Sold 52,000 72,000 92,000 $ $ $ 135,200 $ 187,200 $ 239,200 400,000 $ 400,000 $ 400,000 535,200 $ 587,200 $ 639,200 Total costs: Variable costs Fixed Costs Total Costs Cost per Unit: Variable Cost Fixed Cost Total cost per Unit $ $ $ 2.60 $ 7.69 $ 10.29 $ 2.60 $ 5.56 $ 8.16 $ 2.60 4.35 6.95 Working Notes: Variable Cost per unit for 52,000 Units = $135,200/52,000 = $2.60 Fixed Cost per unit for 52,000 Units = $400,000/52,000 = $7.69 Fixed Costs total is same weather Increase or decrease in production and sale units. Variable Cost for 72,000 units = 72,000*$2.60 = $187,200 Fixed Cost per unit for 72,000 units = $400,000/72,000 = $5.56 Variable Cost for 92,000 units = 92,000*$2.60 = $239,200 Fixed Cost per unit for 92,000 units = $400,000/92,000 = $4.35

2 Harris Company Contribution Format Income statement Sales $ 751,120 Variable Expenses $ 213,200 Contribution Margin $ 537,920 Fixed Expense $ 400,000 Net Operating Income $ 137,920 $ Working Notes: Sales for 82,000 units = 82,000*$9.16 = $751,120 Variable Expenses = 82,000*$2.60 = $213,200 Fixed Costs total is same weather Increase or decrease in production and sale units.