Tuesday, 24 July 2012

Parker Company manufactures and sells a single product.

Parker Company manufactures and sells a single product.

Required:
1.
A partially completed schedule of the company's total and per unit costs over a relevant range of 60,000 to 100,000 units produced and sold each year is given below. Complete the schedule of the company's total and unit costs. (Round the "Cost per unit" to 2 decimal places. Omit the "$" sign in your response.)

   
Units Produced and Sold
            60,000         80,000      100,000
  Total costs:        
     Variable costs   $ 150,000   $    $   
     Fixed costs   360,000         
 



  Total costs   $ 510,000   $     $   
 







  Cost per unit:        
     Variable cost   $    $     $   
     Fixed cost           
 



  Total cost per unit   $    $     $   
 









2.
Assume that the company produces and sells 90,000 units during the year at the selling price of $7.50 per unit. Prepare a contribution format income statement for the year. (Input all amounts as positive values except losses which should be indicated by a minus sign. Omit the "$" sign in your response.)

Parker Company
Contribution Format Income Statement
  Sales $   
  Variable expenses   
 
  Contribution margin   
  Fixed expenses   
 
  Net operating income $   
 




Explanation: