Question

Exercise 18-13 Billings Company has the following information available for September 2017 Unit selling price of video game consoles $796 Unit variable costs Total fixed costs $107,550 Units sold 1,194 $557 Compute the unit contribution margin. Unit contribution margin Prepare a CVP Income statement that shows both total and per unit amounts. BILLINGS COMPANY CVP Income Statement Total Per Unit Compute Billings' break-even point in units. Break-even point in units units

Answer 1

A. Unit contribution margin = Unit selling price of video game consoles - Unit variable costs

= 796 - 557

= $ 239

B.

CVP income statement that shows both total and per unit amounts
Billings Company
CVP Income Statement
For the year ending September 2017
	TOTAL	PER UNIT
Sales Price ($796 x 1194)	$ 950,424.00	$       796.00
Variable Costs ($557 x 1194)	$ 665,058.00	$       557.00
Contribution Margin	$ 285,366.00	$       239.00
Fixed Costs	$ 107,550.00	-
Net Operating Income	$ 177,816.00	-

C. Break-even point in units = Total fixed costs / Contribution Margin PER UNIT

= $ 107,550 / $ 239 per unit

= 450 units

D.

CVP income statement for the break-even point that shows both total and per unit
Billings Company
CVP Income Statement
For the year ending September 2017
	TOTAL	PER UNIT
Sales Price ($796 x 450)	$   358,200.00	$       796.00
Variable Costs ($557 x450)	$   250,650.00	$       557.00
Contribution Margin	$   107,550.00	$       239.00
Fixed Costs	$   107,550.00	-
Net Operating Income	-	-