Harris Company manufactures and sells a single product A partially completed sch

Question

Harris Company manufactures and sells a single product A partially completed schedule of the company's total and per unit costs over the relevant range of 60.000 to 100.000 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.) Assume that the company produces and sells 90,000 units during the year at a selling price of $9.60 per unit. Prepare a contribution format income statement for the year.

Explanation / Answer

Cost elements Units produced and Sold 60000 80000 100000 Total Costs: Variable Costs $ 2,16,000 $ 2,88,000 $ 3,60,000 Fixed Costs $ 4,00,000 $ 4,00,000 $ 4,00,000 Total Costs: $ 6,16,000 $ 6,88,000 $ 7,60,000 Cost per Unit variable cost $3.60 $3.60 $3.60 Fixed Costs $6.67 $5.00 $4.00 Total cost per unit $10.27 $8.60 $7.60 Harris Company Contribution Format Income statement Sales (90000*$9.60) $ 8,64,000 Less: Variable Expenses (90000* $3.60) $ 3,24,000 Contribution Margin $ 5,40,000 Less: Fixed Expenses $ 4,00,000 Net Operating Income $ 1,40,000

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