Contribution Margin: The contribution margin is the difference between the sales value of the company and the variable costs of the company. With the contribution margin the profitability of the individual products can be determined. Break-Even Point: The break-even point is a point where total cost incurred are the same as the total revenue earned. At the break-even point the profit will be zero. The break-even point is the point in the business where there is no loss and no gain. Cost-Volume-Profit (CVP) Income Statement: The cost-volume-profit income statement refers to that income statement which highlights the cost behavior as a variable cost and fixed costs. It also shows the contribution margin of the company. This statement is for the internal use in the company. The format of this statement depends upon the need of the business. To determine: (a) The unit contribution margin. (b) The CVP income statement showing total and per unit amounts. (c) The break-even points in units. (d) The CVP income statement for the break-even point showing total and per unit amounts.

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Chapter 22, Problem 22.10E

To determine

Contribution Margin: The contribution margin is the difference between the sales value of the company and the variable costs of the company. With the contribution margin the profitability of the individual products can be determined.

Break-Even Point: The break-even point is a point where total cost incurred are the same as the total revenue earned. At the break-even point the profit will be zero. The break-even point is the point in the business where there is no loss and no gain.

Cost-Volume-Profit (CVP) Income Statement: The cost-volume-profit income statement refers to that income statement which highlights the cost behavior as a variable cost and fixed costs. It also shows the contribution margin of the company. This statement is for the internal use in the company. The format of this statement depends upon the need of the business.

To determine: (a) The unit contribution margin.

(b) The CVP income statement showing total and per unit amounts.

(c) The break-even points in units.

(d) The CVP income statement for the break-even point showing total and per unit amounts.

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