Billings Company has the following information available for September 2017. A.)

Question

Billings Company has the following information available for September 2017.

A.) Compute the unit contribution margin.

Unit contribution margin________

B.) Prepare a CVP income statement that shows both total and per unit amounts.

C.) Compute Billings’ break-even point in units.

D.) Prepare a CVP income statement for the break-even point that shows both total and per unit amounts.

  

Unit selling price of video game consoles $712 Unit variable costs $498 Total fixed costs $96,300 Units sold 1,068

Explanation / Answer

a)unit contribution margin = selling price -variable cost

                                              = 712-498

                                             = $ 214 per video game

b

c)Break even point = Fixed cost/contribution per game

                            = 96300/ 214

                           = 450 games

d)

Per unit Total sales 712 760416   [712*1068] less:Variabl cost 498 531864    [498*1068] contribution margin 214 228552 less:Fixed cost 96300 net income 132252

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