EXERCISE 5-9 Cost Behavior; Contribution Income Statement (LOI, LO4) Parker Company manufactures and sells a single product. 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 sol given below:
PART-1)
| 60,000 | 80,000 | 100,000 | |
| Total Costs: | |||
| Varaible costs | $150,000 | $200,000 | $250,000 |
| Fixed costs | $360,000 | $360,000 | $360,000 |
| Total Costs: | $510,000 | $560,000 | $610,000 |
| Cost per unit | |||
| Varaible costs | $2.50 | $2.50 | $2.50 |
| Fixed costs | $6.00 | $4.50 | $3.60 |
| Total Costs: | $8.50 | $7.00 | $6.10 |
PART-2)
| Sales: | $675,000 |
| Variable expenses: | |
| Variable selling | $225,000 |
| Contribution Margin | $450,000 |
| Fixed expenses | |
| Fixed selling: | $360,000 |
| Net operating income | $90,000 |
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