Problem 1

Haram Corporation is a wholesaler that sells a single product. Management has provided the following cost data for two levels of monthly sales volume. The company sells the product for $182.10 per unit.

Year 1 Year 2 Year 3

Sales volume (units) 60,000 80,000 110,000

Sales $2,100,000 $2,800,000 $3,850,000

Expenses:

Cost of Goods Sold (840,000) (1,120,000) (1,540,000)

Salaries (520,000) (680,000) (920,000)

Rent ( 50,000) ( 50,000) ( 50,000)

Income Taxes ( 70,560) ( 94,080) (129,860)

Selling and Administrative (504,800) (656,400) (883,800)

Net Operating Income $164,640 $199,520 $326,340

Required A: Compute the Cost/Unit for Cost of Goods Sold, Salaries, Rent and Selling and Administrative Expenses for Years 1-3.

Year 1 Year 2 Year 3

Cost of Goods Sold

Salaries

Rent

Selling and Administrative