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:

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

$\frac{Fixed\:Cost}{Contribution \:Margin} = Break\: Even\: Point_{units}$

$\frac{38,760}{114} = Break\: Even\: Point_{units}$

BEP 340 units

In dollars 340 x $570 each  = 193,800

Answer 2

Answer:please refer to the explanation section

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