Exercise 111 Cost Behavior Contribution Format Income Statem

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

Solution

[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