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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