Question

Wildhorse Company has the following information available for September 2020.

Unit selling price of video game consoles		$570
Unit variable costs		$456
Total fixed costs		$38,760
Units sold		600

Compute the unit contribution margin.

Unit contribution margin

LINK TO TEXT LINK TO TEXT

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

WILDHORSE COMPANY CVP Income Statement For the Month Ended September 30, 2020
		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		$

LINK TO TEXT LINK TO TEXT

Compute Wildhorse’ break-even point in units.

Break-even point in units

units

LINK TO TEXT LINK TO TEXT

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

WILDHORSE COMPANY CVP Income Statement For the Month Ended September 30, 2020
		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

1
Unit selling price	570
Less: Unit variable costs	456
Unit contribution margin	114
2
WILDHORSE COMPANY
CVP Income Statement
For the Month Ended September 30, 2020
	Total	Per unit
Sales	342000	570
Variable Costs	273600	456
Contribution Margin	68400	114
Fixed Costs	38760
Net Income/(Loss)	29640
3
Fixed Costs	38760
/ Unit contribution margin	114
Break-even point in units	340	units
4
WILDHORSE COMPANY
CVP Income Statement
For the Month Ended September 30, 2020
	Total	Per unit
Sales	193800	570
Variable Costs	155040	456
Contribution Margin	38760	114
Fixed Costs	38760
Net Income/(Loss)	0