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Harris Company manufactures and sells a single product

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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 69,000 to 109,000 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 the company produces and sells 99,000 units during the year at a selling price of $9.08 per unit. Prepare a contribution format income statement for the year.



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    1. Quizzma Team

      Contribution Format Income Statement Example

      Harris Company manufactures and sells a single product. Let’s prepare a contribution format income statement for the year, assuming the company produces and sells 99,000 units at a selling price of $9.08 per unit.

      Data Needed:

      • Selling Price per Unit: $9.08
      • Units Sold: 99,000
      • Variable Cost per Unit: $5 (hypothetical value for illustration)
      • Fixed Costs: $55,000

      Contribution Format Income Statement

      1. Sales Revenue:

        Sales=Selling Price per Unit×Units SoldSales=9.08×99,000=898,920

      2. Variable Costs:

        Variable Costs=Variable Cost per Unit×Units SoldVariable Costs=5×99,000=495,000

      3. Contribution Margin:

        Contribution Margin=Sales−Variable Costs\text{Contribution Margin} = \text{Sales} – \text{Variable Costs}
        Contribution Margin=898,920−495,000=403,920\text{Contribution Margin} = 898,920 – 495,000 = 403,920

      4. Fixed Costs:

        Fixed Costs=55,000

      5. Net Operating Income:

        \text{Net Operating Income} = \text{Contribution Margin} – \text{Fixed Costs}Net Operating Income=Contribution Margin−Fixed Costs

        Net Operating Income=403,920−55,000=348,920

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