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 66,000 to 106,000 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.

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
	66,000	86,000	106,000
Total costs:
Variable costs	$250,800
Fixed costs	380,000
Total costs	$630,800
Cost per unit:
Variable cost
Fixed cost
Total cost per unit

2. Assume that the company produces and sells 96,000 units during the year at a selling price of $9.22 per unit. Prepare a contribution format income statement for the year.

  

Assume that the company produces and sells 96,000 units during the year at a selling price of $9.22 per unit. Prepare a contribution format income statement for the year.

Harris Company
Contribution Format Income Statement

Answer 1

Complete the schedule of the company’s total costs and costs per unit as given in the relevant tab below.

	66000	86000	106000
Total cost
Variable cost	250800	326800	402800
Fixed cost	380000	380000	380000
Total cost	630800	706800	782800
Cost per unit
Variable cost	3.8	3.8	3.8
Fixed cost	5.76	4.42	3.58
Total cost per unit	9.56	8.22	7.38

Contribution format income statement :

Sales (96000*9.22)	885120
Variable cost (96000*3.8)	-364800
Contribution margin	520320
Fixed cost	-380000
Net income	140320