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 52,000 to 92,000 units is given below: 2. Assume that the company produces and sells 82,000 units during the year at a selling price of $9.39 per unit. Prepare a contribution format income statement for the year.

Answer 1

Variable Cost or Fixed Cost in Not given in Question

Assume the Amount of Variable Cost at 52000 unit = $156000

Assume The Amount of Fixed Cost at 52000 unit = $260000

Particulars	52000 unit	72000 unit	92000 unit
Total Costs:-
Variable Costs	$156000	$216000	$276000
Fixed Costs	$260000	$260000	$260000
Total Costs	$416000	$476000	$536000
Cost per unit :-
Variable Cost	$3	$3	$3
Fixed Cost	$5	$3.61	$2.83
Total Cost Per Unit	$8	$6.61	$5.83

1) Variable Cost Per Unit :-

= $156000 / 52000

= $3 per unit

Contribution Format Income Statement :-

Particulars	Amount($)
Sales (82000*$9.39)	769980
Less : Variable Cost (82000*$3)	(246000)
Contribution Margin	523980
Less : Fixed Expenses	(260000)
Net Operating Income	263980