Question

Billings Company has the following information available for September 2017.

Unit selling price of video game consoles		$556
Unit variable costs		$389
Total fixed costs		$75,150
Units sold		834

(a)

Correct answer iconYour answer is correct.

Compute the unit contribution margin.

Unit contribution margin

Attempts: 1 of 7 used

(b)

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

BILLINGS COMPANY CVP Income Statement                                                                       For the Quarter Ended September 30, 2017For the Month Ended September 30, 2017September 30, 2017
		Total		Per Unit
Administrative ExpensesContribution MarginCost of Goods SoldFixed CostsGross ProfitNet Income/(Loss)SalesSelling ExpensesVariable Costs		$		$
Administrative ExpensesContribution MarginCost of Goods SoldFixed CostsGross ProfitNet Income/(Loss)SalesSelling ExpensesVariable Costs
Administrative ExpensesContribution MarginCost of Goods SoldFixed CostsGross ProfitNet Income/(Loss)SalesSelling ExpensesVariable Costs				$
Administrative ExpensesContribution MarginCost of Goods SoldFixed CostsGross ProfitNet Income/(Loss)SalesSelling ExpensesVariable Costs
Administrative ExpensesContribution MarginCost of Goods SoldFixed CostsGross ProfitNet Income/(Loss)SalesSelling ExpensesVariable Costs		$

Answer 1

Ans. A	Unit selling price	$556
	Less: Unit variable costs	-$389
	Unit contribution margin	$167
Ans. B	BILLINGS COMPANY
	CVP Income Statement
	For the Month of September 2017
		Total	Per unit
	Sales (834 *p)	$463,704	$556
	Variable expenses (834 * v)	-$324,426	-$389
	Contribution margin	$139,278	$167
	Fixed expenses	-$75,150
	Net operating income	$64,128
	P   =   price per unit
	V = variable cost per unit