Question

Exercise 1-11 Cost Behavior; Contribution Format Income Statement [LO1-4, LO1-6] 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 relevant tab below. (Round the per unit variable cost and fixed cost to 2 decimal places.) Units Produced and Sold 30,000 40,000 50,000 $ 180,000 300,000 480,000 $ $ 0 $ 0 Total costs: Variable cost Fixed cost Total costs Cost per unit: Variable cost Fixed cost Total cost per unit $ CA 0.00 $ 0.00 $ 0.00 < Required 1 Required 2 >

2 parts of the same question

Answer 1

Correct Answer:

Requirement 1:

units produced and sold
units	30000	40000	50000
Total Costs:
Variable cost	$                180,000	$              240,000	$          300,000
fixed cost	$                300,000	$              300,000	$          300,000
Total Costs:	$                480,000	$              540,000	$          600,000
Cost per unit:
Variable cost	$                       6.00	$                     6.00	$                 6.00
Fixed cost	$                     10.00	$                     7.50	$                 6.00
Total cost per unit	$                     16.00	$                   13.50	$              12.00

Requirement 2:

Harris Company
Contribution Format income statement
Units	45000
sales revenue ( 45000 units * $ 16)	$          720,000.00
Less: variable cost (45000 units * $ 6 )	$          270,000.00
Contribution margin	$          450,000.00
Less: Fixed costs	$          300,000.00
Net operating income	$          150,000.00

End of Answer.

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