Exercise 1-11 Cost Behavior; Contribution Format Income Statement [L01-4, L01-6]

Question

Exercise 1-11 Cost Behavior; Contribution Format Income Statement [L01-4, L01-6] 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 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 2. Assume that the company produces and sells 96,000 units during the year at a selling price of $770 per unit. Prepare a contribution format income statement for the year

Explanation / Answer

[Total fixed costs and Variable cost/unit do not change with change in units].

66000 86000 106000 Total costs: Variable costs 204600 266,600 328600 Fixed costs 310,000 310,000 310,000 Total costs 514600 576600 638600 Cost per unit: Variable cost 3.1 3.1 3.1 Fixed cost 4.70 3.60 2.92 Total cost per unit 7.80 6.70 6.02

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