Business, 18.06.2020 22:57 mari200150

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 158,700
Fixed Costs 360,000
Total Costs 518,700
Cost Per Unit
Variable Cost
Fixed Cost
Total Cost Per Unit
Assume that the company produces and sells 99,000 units during the year at a selling price of $7.34 per unit. Prepare a contribution format income statement for the year. (Do not round intermediate calculations.)

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Answer from: edjiejwi

Answer and Explanation:

1. The preparation of the schedule of the company’s total and unit cost is shown below:-

Particulars Units produced and sold

69,000 89,000 109,000

Total cost

Variable cost $158,700 $204,700 $250,700

Fixed cost $360,000 $360,000 $360,000

Total cost $518,700 $564,700 $610,700

Cost per unit

Variable cost $2.30 $2.30 $2.30

Fixed costs $5.22 $4.04 $3.30

Total cost per unit $7.52 $6.34 $5.60

Working note

Variable cost per unit = Variable cost ÷ Units consumed

= 158,700 ÷ 69,000

= $2.3

Now, Variable cost for 89,000 units = $2.3 × 89,000

= $204,700

and Variable cost for 109,000 = $2.3 × 109,000

= $250,700

Fixed cost per unit for 69,000 = $360,000 ÷ 69,000

= $5.22

Now, Fixed cost for 89,000 units = $360,000 ÷ 89,000

= $4.04

and Fixed cost for 109,000 units = $360,000 ÷ 109,000

= $3.30

2.The preparation of contribution format income statement for the year is shown below:-

Income statement

For the year ended

Particulars Amount

Sales units 99,000

Selling price per unit $7.34

Sales amount $726,660

(99,000 × $7.34)

Less: Variable cost $227,700

(99,000 × $2.30)

Contribution $498,960

Less: Fixed cost $360,000

Net income $138,960

So, to reach net income we simply deduct the fixed cost from contribution.

Answer from: Quest

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Answer from: Quest

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