Question: Determining the break-even point and preparing a contribution margin income statement Nickolas Company manufactures radio and cassette players and sells them for $100 each. According

Determining the break-even point and preparing a contribution margin income statement Nickolas Company manufactures radio and cassette players and sells them for $100 each. According to the company’s records, the variable costs, including direct labor and direct materials, are $50. Factory depreciation and other fixed manufacturing costs are $192,000 per year. Nickolas pays its salespeople a commission of $18 per unit. Annual fixed selling and administrative costs are $128,000.

Required

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. Confirm your results by preparing a contribution margin income statement for the breakeven point sales volume.

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