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Norton, Inc. has the following information available for September 2020.

Unit selling price of video game consoles $400
Unit variable costs $280
Total fixed costs $48,000
Units sold 500

a. Prepare a CVP income statement that shows both total and per unit amounts.
b. Compute Norton's breakeven in units.
c. Prepare a CVP income statement for the break-even point that shows both total and per unit amounts.


Answer :

Answer: See explanation

Explanation:

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

CVP INCOME STATEMENT

Per unit. Total

Sales (500 units). 400. 200,000

Variable expense 280 140,000

Contribution margin. 120 60,000

Fixed expense. 48,000

Net operating Income. 12,000

b. Compute Norton's breakeven in units.

Breakeven point = 48000 / 120 = 400

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

CVP income statement for the break-even point

Per unit. Total

Sales (400 units). 400. 160,000

Variable expense 280 112,000

Contribution margin. 120 48000

Fixed expense. 48,000

Net operating Income. 0

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