A partially completed schedule of the company’s total and per unit costs over th

Question

A partially completed schedule of the company’s total and per unit costs over the relevant range of 65,000 to 105,000 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 95,000 units during the year at a selling price of $8.46 per unit. Prepare a contribution format income statement for the year.

Explanation / Answer

1 Units Produced and Sold 65,000 85,000 105,000 Total costs: Variable costs $240,500 314500 388500 Fixed costs 320,000 320,000 320,000 Total costs $560,500 $634,500 $708,500 Cost per unit: Variable cost $3.70 3.7 3.7 Fixed cost 4.92 3.76 3.05 Total cost per unit $8.62 $7.46 $6.75 2 Harris Company Contribution Format Income Statement Sales 803700 =95000*8.46 Variable expenses 351500 =95000*3.7 Contribution margin 452200 Fixed expense 320000 Net operating income 132200

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