Answer:
Instructions are below.
Explanation:
Giving the following information:
Unit selling price of video game consoles $410
Unit variable costs $328
Total fixed costs $36,900
Units sold 600
First, we need to determine the unitary contribution margin:
Unitary contribution margin= 410 - 328= $82
Contribution margin income statement:
Sales= 600*410= 246,000
Total variable cost= 600*328= (196,800)
Total contribution margin= 49,200
Fixed costs= (36,900)
Net operating income= $12,300
To calculate the break-even point in units, we need to use the following formula:
Break-even point in units= fixed costs/ contribution margin per unit
Break-even point in units= 39,200/82
Break-even point in units= 478 units
Finally, the income statement for the break-even point:
Sales= 478*410= 195,980
Total variable cost= 478*328= (156,784)
Total contribution margin= 39,196
Total fixed costs= (39,200)
Net operating income= (4)
