Mueller Company is considering the production of a new product. The expected variable cost is $21 per unit. Annual fixed costs are expected to be $882,000. The anticipated sales price is $84 each.
Determine the break-even point in units and dollars using each of the following:
a. Equation method.
b. Contribution margin per unit approach.
c. Contribution margin ratio approach.
d. Prepare a break-even graph to illustrate the cost-volume-profit relationships.