Exercise 18-13 Cannes Company has the following information available for Septem
ID: 2477120 • 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
Unit selling price of video game consoles $400 Unit variable costs $275 Total fixed costs $52,000 Units sold 600Explanation / Answer
(a) Contribution Margin per Unit
Selling Price = $400
Less: Variable Cost = $275
Contribution Margin per Unit =$125
(c) Breakeven Point in Units= Fixed Cost/Contribution margin per unit
=$52000/$125
=416 Units
(d)
Cannes Company CVP Income Statement For the Month Ended September 30, 2014 Total Per Unit Sales $240,000 $400 Variable Cost $165,000 $275 Contribution Margin $75,000 $125 Fixed Cost $52,000 Net Income $23,000Related Questions
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