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Carla Vista Company has the following information available for September 2020. Unit selling price of video game consoles $400 Unit variable costs $240 Total fixed costs $54,400 Units sold 6001. Compute the unit contribution margin. Unit contribution margin_______ 2. Compute Carla Vista' break-even point in units. 3. Prepare a CVP income statement for the break-even point that shows both total and per unit amounts.

Respuesta :

Answer and Explanation:

a. The computation of unit contribution margin is shown below:

As we know that

Unit contribution margin = Unit selling price - unit variable cost

= $400 - $240

= $160

b. The break even point in units is as follows

As we know that

= Fixed cost ÷ unit contribution margin

= $54,400 ÷ $160

= $340

c. Now the preparation of the CVP income statement for the break even point is shown below:

                                               Carla Vista Company

                                           CVP Income statement

Particulars                              Amount              Units

Sales                                      $136,000            $400

Less: Variable cost               -$81,600               $240

Contribution margin            $54,400               $160

Less: Fixed cost                   -$54,400

Net operating income          $0

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