Question

dar Grove Industries produces and sells a cell phone-operated home security control. Information regarding the costs and sales of security controls during May 2017 are provided below. Unit selling price of security control $47 Unit variable costs $24 Total monthly fixed costs $124,000 Units sold 8,000 Prepare a CVP income statement for Cedar Grove Industries for the month of May. Provide per unit values and total values. Cedar Grove Industries CVP Income Statement Total Per Unit $ $ $ $

Answer 1

Answer:

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Particulars                              Unit cost       Amount

Sales income                         $ 47            $ 376,000      

Less: Variable cost                $ 24           $ 192,000

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Contribution Margin             $ 13           $ 184,000

Less: Fixed cost                                        $ 124,000

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Net income                                                $ 60,000

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Explanation:

Given:

Unit selling price = $ 47

Variable cost = $ 24

Total monthly fixed cost = $ 124,000

Number of units sold = 8,000

CVP income statement for Cedar Grove Industries for the month of May is as:

.................................................................................................

Particulars                              Unit cost       Amount

Sales income                         $ 47            $ 376,000      

Less: Variable cost                $ 24           $ 192,000

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Contribution Margin             $ 13           $ 184,000

Less: Fixed cost                                        $ 124,000

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Net income                                               $ 60,000

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here, the amount is for the total unit i.e 8000 units multiplied by the unit cost