Harris Company manufactures and sells a single product. A partially completed sc

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 58,000 to 98,000 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 88,000 units during the year at a selling price of $10.33 per unit. Prepare a contribution format income statement for the year Complete this question by entering your answers in the tabs below. Required 1 Required 2 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 58,000 78,000 98,000 Total costs 191,400 470,000 661.400 $ Variable cost Fixed cost Total costs Cost per unit: Variable cost Fixed cost Total cost per unit 0.00 $ 0.00$ 0.00

Explanation / Answer

note : variable cost per unit will be the same for different units produced and sold.

Total variable cost will increase with increase in units.

Fixed cost per unit will reduce with increasing units produced and sold.

total fixed cost will be the same for all levels.

so,

the variable cost per unit = total variable cost at any level / units at that level

=>$191,400 / 58,000

=>$3.30 per unit.

total fixed cost will be $470,000 for all levels.

now,

requirement 1:

requirement 2:

contribution format income statement:

58,000 78,000 98,000 total costs: variable cost ($3.30*78,000) , ($3.30*98,000) $191,400 257,400 323,400 fixed cost (same for all levels) 470,000 470,000 470,000 total cost 661,400 727,400 793,400 cost per unit: variable cost (as calculated above, as calculated above) $3.30 3.30 3.30 fixed cost (total fixed cost / number of units) (470,000/58,000) (470,000/78,000) (470,000/98,000) 8.10 6.03 4.80 total cost per unit $11.40 $9.33 $8.10

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