Exercise 18-13 Cannes Company has the following information available for Septem
ID: 2477110 • Letter: E
Question
Exercise 18-13 Cannes Company has the following information available for September 2014. Unit selling price of video game consoles $800 Unit variable costs $550 Total fixed costs $100,000 Units sold 1,200 (a) Compute the contribution margin per unit. 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 Administrative ExpensesContribution MarginCost of Goods SoldFixed CostsGross ProfitNet Income/(Loss)SalesSelling ExpensesVariable Costs $ $ Administrative ExpensesContribution MarginCost of Goods SoldFixed CostsGross ProfitNet Income/(Loss)SalesSelling ExpensesVariable Costs Administrative ExpensesContribution MarginCost of Goods SoldFixed CostsGross ProfitNet Income/(Loss)SalesSelling ExpensesVariable Costs $ Administrative ExpensesContribution MarginCost of Goods SoldFixed CostsGross ProfitNet Income/(Loss)SalesSelling ExpensesVariable Costs Administrative ExpensesContribution MarginCost of Goods SoldFixed CostsGross ProfitNet Income/(Loss)SalesSelling ExpensesVariable Costs $ (c) Compute Cannes' break-even point in units. Break-even point in units 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 Administrative ExpensesContribution MarginCost of Goods SoldFixed CostsGross ProfitNet Income/(Loss)SalesSelling ExpensesVariable Costs $ $ Administrative ExpensesContribution MarginCost of Goods SoldFixed CostsGross ProfitNet Income/(Loss)SalesSelling ExpensesVariable Costs Administrative ExpensesContribution MarginCost of Goods SoldFixed CostsGross ProfitNet Income/(Loss)SalesSelling ExpensesVariable Costs $ Administrative ExpensesContribution MarginCost of Goods SoldFixed CostsGross ProfitNet Income/(Loss)SalesSelling ExpensesVariable Costs Administrative ExpensesContribution MarginCost of Goods SoldFixed CostsGross ProfitNet Income/(Loss)SalesSelling ExpensesVariable Costs $
Explanation / Answer
Answer:(a) Contribution margin per unit=Selling price-Variable cost
=$800-$550=$250 per unit
Answer:(b)
Cannes Company Income Statement Particulars Amount Per unit Sales 960000 800 Less: variable cost 660000 550 Contribution margin 300000 250 Less: Fixed cost 100000 Net income 200000 166.6667Related Questions
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