Exercise 18-13 Cannes Company has the following information available for Septem
ID: 2475118 • Letter: E
Question
Exercise 18-13
Cannes Company has the following information available for September 2014.
(a) Compute the contribution margin per unit.
(b) Prepare a CVP income statement that shows both total and per unit amounts.
CANNES COMPANY
CVP Income Statement
For the Month Ended September 30, 2014
Total
Per Unit
(c) Compute Cannes' break-even point in units.
(d) Prepare a CVP income statement for the break-even point that shows both total and per unit amounts.
CANNES COMPANY
CVP Income Statement
For the Month Ended September 30, 2014
Total
Per Unit
{C}
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Unit selling price of video game consoles $800 Unit variable costs $550 Total fixed costs $100,000 Units sold 1,200
Explanation / Answer
a) calculation of contribution margin pER unit
Selling price per unit $ 800
Less: variable cost per unit $(550)
Contribution margin pER unit $ 250
C) break even points in units
Break even points = contribution value + Fixed cost
Break even points= ($250* 1200)+ $100,000 = $ 400,000
Break even point in units = $ 400,000/1200= $ 333.33 per unit
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