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Exercise 5-13 (Video) Crane Company has the following information available for September 2020
Exercise 5-13 (Video)
Crane Company has the following information available for September 2020.
| Unit selling price of video game consoles | $600 | |
| Unit variable costs | $360 | |
| Total fixed costs | $93,600 | |
| Units sold | 600 |
Compute the unit contribution margin.
Prepare a CVP income statement that shows both total and per unit amounts.
Compute Crane’ break-even point in units.
Prepare a CVP income statement for the break-even point that shows both total and per unit amounts.
Expert Solution
Part 1
Unit contribution margin = 600 - 360 = 240
Part 2
Sales = 600 × $600 = $360,000
Variable costs = 600 × $360 = $216,000
Part 3
| Sales | = | Variable costs + Fixed costs |
| $600X | = | $360X + $93,600 |
| $240X | = | 93,600 |
| X | = | 390 units |
Part 4
Sales = 390 × $600 = $234,000
Variable costs = 390 × $360 = $140,400
Final Answer:
Prepare a CVP income statement that shows both total and per unit amounts.
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CRANE COMPANY
CVP Income Statement For the Month Ended September 30, 2020 |
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Total
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Per Unit
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$
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$
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$
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$
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Compute Crane’ break-even point in units.
| Break-even point in units |
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units |
Prepare a CVP income statement for the break-even point that shows both total and per unit amounts.
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CRANE COMPANY
CVP Income Statement For the Month Ended September 30, 2020 |
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Total
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Per Unit
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$
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$
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$
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$
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