Question

Sandhill Company has the following information available for September 2020.

Unit selling price of video game consoles		$480
Unit variable costs		$288
Total fixed costs		$57,600
Units sold		600

Part 1

Compute the unit contribution margin.

Unit contribution margin

enter the unit contribution margin

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Part 2

Prepare a CVP income statement that shows both total and per unit amounts.

SANDHILL COMPANY CVP Income Statement For the Month Ended September 30, 2020
		Total		Per Unit
select an income statement item                                                                      Administrative ExpensesContribution MarginCost of Goods SoldFixed CostsGross ProfitNet Income/(Loss)SalesSelling ExpensesVariable Costs		$enter a dollar amount		$enter a dollar amount
select an income statement item                                                                      Administrative ExpensesContribution MarginCost of Goods SoldFixed CostsGross ProfitNet Income/(Loss)SalesSelling ExpensesVariable Costs		enter a dollar amount		enter a dollar amount
select a summarizing line for the first part                                                                      Administrative ExpensesContribution MarginCost of Goods SoldFixed CostsGross ProfitNet Income/(Loss)SalesSelling ExpensesVariable Costs		enter a total amount for the first part		$enter a total amount per unit
select an income statement item                                                                      Administrative ExpensesContribution MarginCost of Goods SoldFixed CostsGross ProfitNet Income/(Loss)SalesSelling ExpensesVariable Costs		enter a dollar amount
select a closing name for this statement                                                                      Administrative ExpensesContribution MarginCost of Goods SoldFixed CostsGross ProfitNet Income/(Loss)SalesSelling ExpensesVariable Costs		$enter a total net income or loss amount

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Part 3

Compute Sandhill’ break-even point in units.

Break-even point in units

enter Break-even point in units

units

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Part 4

Prepare a CVP income statement for the break-even point that shows both total and per unit amounts.

SANDHILL COMPANY CVP Income Statement For the Month Ended September 30, 2020
		Total		Per Unit
select an income statement item                                                                      Administrative ExpensesContribution MarginCost of Goods SoldFixed CostsGross ProfitNet Income/(Loss)SalesSelling ExpensesVariable Costs		$enter a dollar amount		$enter a dollar amount
select an income statement item                                                                      Administrative ExpensesContribution MarginCost of Goods SoldFixed CostsGross ProfitNet Income/(Loss)SalesSelling ExpensesVariable Costs		enter a dollar amount		enter a dollar amount
select a summarizing line for the first part                                                                      Administrative ExpensesContribution MarginCost of Goods SoldFixed CostsGross ProfitNet Income/(Loss)SalesSelling ExpensesVariable Costs		enter a total amount for the first part		$enter a total amount per unit
select an income statement item                                                                      Administrative ExpensesContribution MarginCost of Goods SoldFixed CostsGross ProfitNet Income/(Loss)SalesSelling ExpensesVariable Costs		enter a dollar amount
select a closing name for this statement                                                                      Administrative ExpensesContribution MarginCost of Goods SoldFixed CostsGross ProfitNet Income/(Loss)SalesSelling ExpensesVariable Costs		$enter a total net income or loss amount

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Answer 1

Part 1

Unit selling price	$   480
less: Unit variable cost	$ (288)
Contribution margin per unit	$   192

Part 2

SANDHILL COMPANY
CVP Income Statement
For the month ended September 30, 2020
	Total	Per Unit
Sales ($480*600)	$ 288,000	$         480
Less: Variable cost ($288*600)	$ 172,800	$         288
Contribution margin	$ 115,200	$         192
Fixed costs	$    57,600
Net income	$    57,600

Part 3

Break even point in units = Total fixed costs / Contribution margin per unit

Break even point in units = $57,600/$192

Break even point in units = 300 units

Part 4

SANDHILL COMPANY
CVP Income Statement
For the month ended September 30, 2020
	Total	Per Unit
Sales ($480*300)	$ 144,000	$         480
Less: Variable cost ($288*300)	$    86,400	$         288
Contribution margin	$    57,600	$         192
Fixed costs	$    57,600
Net income	$               -

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