Answer:
1. 67,000 87,000 107,000
Total costs:
Variable costs 261,300 339.300 417.300
Fixed costs 360,000 360,000 360,000
Total costs $621,300 $699,300 $777,300
Cost per unit:
Variable costs $3.9 $3.9 $3.9
Fixed costs $5.37 $4.14 $3.36
Total cost $9.27 $8.04 $7.26
2. Particulars Amount($)
Sales(97,000*8.08) $783,760
Variable costs(97,000*3.9) $378,300
Contribution margin $405,460
Fixed costs $360,000
Net operating income $45,460
Explanation:
1. The schedule of the company’s total costs and costs per unit would be as follows:
67,000 87,000 107,000
Total costs:
Variable costs 261,300 339.300 417.300
Fixed costs 360,000 360,000 360,000
Total costs $621,300 $699,300 $777,300
Cost per unit:
Variable costs $3.9 $3.9 $3.9
=(261300/67000)
Fixed costs $5.37 $4.14 $3.36
=(360,000/67000) =(360,000/87000) =(360,000/107,000)
Total cost $9.27 $8.04 $7.26
2. The contribution format income statement for the year would be as follows:
Particulars Amount($)
Sales(97,000*8.08) $783,760
Variable costs(97,000*3.9) $378,300
Contribution margin $405,460
Fixed costs $360,000
Net operating income $45,460
