10.00 points Harris Company manufactures and sells a single product Required: 1.

Question

10.00 points Harris Company manufactures and sells a single product Required: 1. A partially completed schedule of the company's total and per unit costs over the relevant range of 69,000 to 109,000 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.) Units Produced and Sold 69,000 89,000 109,000| Total costs: Variable costs 27,70 Fixed costs Total costs Cost per unit 490,000. S 717,700 $ Variable cost Fixed cost Total cost per unit 0.00 S 0.00 S 0.00 2. Assume that the company produces and sells 99,000 units during the year at a selling price of $9.81 per unit Prepare a contribution format income statement for the year Harris Company Contribution Format Income Statement

Explanation / Answer

1. If company produces and sold

Working notes

Variable cost changes with the Change of level of output

Therefore

At 69000 units, variable cost is $227,700

At 89,000 units, variable cost is (227,700*89000/69000) $293,700.

At 109000 units, variable cost is (227,700*109000/69000) $359,700.

Fixed cost is same at all level of output.

Cost per unit formulae is Cost / units produced

2. If company produced and sold 99000 units.

69000 89000 109000 Variable cost $227,700 $293700 $359700 Fixed cost $490,000 $490,000 $490,000 Total cost $717,700 $783,700 $849,700 Cost per unit Variable cost $3.3 $3.3 $3.3 Fixed cost $7.10 $5.50 $4.50 Total cost per unit $10.40 $8.80 $7.80

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