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 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 $ $ $ $ Compute Wildhorse’ 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. WILDHORSE COMPANY CVP Income Statement For the Month Ended September 30, 2020 Total Per Unit $ $ $ $ Click if you would like to Show Work for this question: Open Show Work

Answer 1

Answer:please refer to the explanation section

Step-by-step explanation:

Unit contribution Margin = selling price per unit - Variable cost per unit

Unit contribution Margin = $ 570 - $ 456 = $ 114

Cost Volume Profit income statement

VOLUME UNIT COST ($) TOTAL ($)

Sales 600 units $570 342000

Variable costs 600 units $ 456 -273600

Contribution margin 600 units $114 68400

Total Fixed Costs -38760

Net income 29640

Break Even Point (units) = Fixed Costs/(Selling price - variable cost)

Break Even Point (units) = 38760/(570 - 456) = 340 units

Answer 2

BEP 340 units or $193,800 of sales

Income Statment :

Sales revenue 340 units x $570 193,800

Variable Cost 340 units x $456 (155,040)

Contribution 38,760‬

Fixed cost (38,760)

Operating Income 0

Explanation:

The break even points is the point at whch operating income is zero.

`Sales \: Revenue - Variable \: Cost = Contribution \: Margin`

570 - 456 = 114 each units generates 114 dollar to aford the fixed cost and make a gain

`(Fixed\:Cost)/(Contribution \:Margin) = Break\: Even\: Point_(units)`

`(38,760)/(114) = Break\: Even\: Point_(units)`

BEP 340 units

In dollars 340 x $570 each = 193,800