Question

Billings Company has the following information available for September 2017.

Unit selling price of video game consoles		$784
Unit variable costs		$549
Total fixed costs		$105,750
Units sold		1,176

Compute the unit contribution margin.

Unit contribution margin

eTextbook and Media

  

  

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		$

eTextbook and Media

  

  

Compute Billings’ break-even point in units.

Break-even point in units

units

eTextbook and Media

  

  

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

BILLINGS COMPANY CVP Income Statement                                                                       For the Quarter Ended September 30, 2017September 30, 2017For the Month Ended September 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

Answer- Unit contribution margin = Selling price per unit – Variable expense per unit

= $784 per unit -$549 per unit

= $235 per unit

BILLINGS COMPANY
CVP Income Statement
Particulars	PER UNIT	Amonut
	$	$
Sales	784	921984
Less:- Variable expenses	549	645624
Contribution Margin	235	276360
Less- Fixed expenses		105750
Net income		170610

Answer-Break-even point in units = Fixed costs/ Unit contribution margin

= $105750/$235 per unit

= 450 units

BILLINGS COMPANY
CVP Income Statement
Particulars	PER UNIT	Amonut
	$	$
Sales	784	352800
Less:- Variable expenses	549	247050
Contribution Margin	235	105750
Less- Fixed expenses		105750
Net income		0