Question

Blossom Industries produces and sells a cell phone-operated home security control. Information regarding the costs and sales of security controls during May 2020 are provided below.

Unit selling price of security control $49
Unit variable costs $28
Total monthly fixed costs $126,000
Units sold 8,300

Required:
Prepare a CVP income statement for Blossom Industries for the month of May.

Answer 1

Answer and Explanation:

The preparation of the CVP income statement for the month of May is presented below:

Sales (8,300 units × $49) $406,700

Less: Variable cost (8,300 units × $28) -$232,400

Contribution margin $174,300

Less: Fixed cost -$126,000

Net income $48,300