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 50,000 to 90,000 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 80,000 units during the year at a selling price of $10.56 per unit. Prepare a contribution format income statement for the year. Units Produced and Sold 50,000 70,000 90,000 Total costs: Variable costs $185,000 Fixed costs 410,000 Total costs $595,000 $0 $0 Cost per unit :Variable cost ? ? ? Fixed cost ? ? ? Total cost per unit $0.00 $0.00 $0.00
Variance Analysis
In layman's terms, variance analysis is an analysis of a difference between planned and actual behavior. Variance analysis is mainly used by the companies to maintain a control over a business. After analyzing differences, companies find the reasons for the variance so that the necessary steps should be taken to correct that variance.
Standard Costing
The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on the various expenses.
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 50,000 to 90,000 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 80,000 units during the year at a selling price of $10.56 per unit. Prepare a contribution format income statement for the year.
Units Produced and Sold
50,000 70,000 90,000
Total costs:
Variable costs $185,000
Fixed costs 410,000
Total costs $595,000 $0 $0
Cost per unit
:Variable cost ? ? ?
Fixed cost ? ? ?
Total cost per unit $0.00 $0.00 $0.00
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