Question

Cullumber Company has the following information available for September 2020. 

Unit selling price of video game consoles	$440
Unit variable costs	$264
Total fixed costs	$73,920
Units sold	600

Compute the unit contribution margin. 

Unit contribution margin _______ 

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

Unit Compute Cullumber' break-even point in units. 

Break-even point in units _______ units 

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

Answer 1

a.	Unit contribution margin	=	$       176
	Cullumber Company
	CVP Income Statement
	For the month ended September 30, 2020
		Total	Per unit
	Sales	$ 2,64,000	$       440
Less:	Variable cost	$ 1,58,400	$       264
	Contribution	$ 1,05,600	$       176
Less:	Fixed cost	$     73,920
	Net Income	$     31,680
b.	Break-even point in units	=	420	units
	Cullumber Company
	CVP Income Statement
	For the month ended September 30, 2020
		Total	Per unit
	Sales	$ 1,84,800	$       440
Less:	Variable cost	$ 1,10,880	$       264
	Contribution	$     73,920	$       176
Less:	Fixed cost	$     73,920
	Net Income	0
	Workings:
	Unit selling Price	=	$       440
Less:	Unit variable cost	=	$       264
	Unit contribution margin	=	$       176
	Break-even point in units	=	Fixed costs / Unit contribution margin
		=	$73920 / $176
		=	420	units