A partially completed schedule of the company\'s total and per unit costs over a

Question

A partially completed schedule of the company's total and per unit costs over a relevant range of 58,000 to 98,000 units produced and sold each year is given below. Complete the schedule of the company's total and unit costs. (Round the "Cost per unit" to 2 decimal places.)

Units Produced and Sold

Assume that the company produces and sells 88,000 units during the year at the selling price of $10.03 per unit. Prepare a contribution format income statement for the year. (Input all amounts as positive values except losses which should be indicated by a minus sign.)

Parker Company manufactures and sells a single product.

Explanation / Answer

Solution.

Calculation of total cost

Units Produced and Sold

2. Calculation of contribution format income statement for the year.

Units Produced and Sold

      58,000       78,000       98,000   Total costs:      Variable costs        $ 174,000   $234,000    $294,000         Fixed costs 470,000   470,000    470,000      Total costs        $ 644,000   $704,000    $ 764,000   Cost per unit:      Variable cost $3 $3    $3         Fixed cost 8.10 6.02 4.79   Total cost per unit $11.10 $9.02    $7.79   

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