Problem 11-28 Determining the break-even point and preparing a contribution margin income statement LO 11-5

Ritchie Manufacturing Company makes a product that it sells for $150 per unit. The company incurs variable manufacturing costs of $67 per unit. Variable selling expenses are $14 per unit, annual fixed manufacturing costs are $454,000, and fixed selling and administrative costs are $277,400 per year.

Required

Determine the break-even point in units and dollars using each of the following approaches:

1. Use the equation method.

2. Use the contribution margin per unit approach.

3. Prepare a contribution margin income statement for the break-even sales volume.

Problem 11-28 Determining the break-even point and preparing a contribution margin income statement LO 11-5

Ritchie Manufacturing Company makes a product that it sells for $150 per unit. The company incurs variable manufacturing costs of $67 per unit. Variable selling expenses are $14 per unit, annual fixed manufacturing costs are $454,000, and fixed selling and administrative costs are $277,400 per year.

Required

Determine the break-even point in units and dollars using each of the following approaches:

1. Use the equation method.

2. Use the contribution margin per unit approach.

3. Prepare a contribution margin income statement for the break-even sales volume.

Problem 11-28 Determining the break-even point and preparing a contribution margin income statement LO 11-5

Ritchie Manufacturing Company makes a product that it sells for $150 per unit. The company incurs variable manufacturing costs of $67 per unit. Variable selling expenses are $14 per unit, annual fixed manufacturing costs are $454,000, and fixed selling and administrative costs are $277,400 per year.

Required

Determine the break-even point in units and dollars using each of the following approaches:

1. Use the equation method.

2. Use the contribution margin per unit approach.

3. Prepare a contribution margin income statement for the break-even sales volume.

Problem 11-28 Determining the break-even point and preparing a contribution margin income statement LO 11-5

Ritchie Manufacturing Company makes a product that it sells for $150 per unit. The company incurs variable manufacturing costs of $67 per unit. Variable selling expenses are $14 per unit, annual fixed manufacturing costs are $454,000, and fixed selling and administrative costs are $277,400 per year.

Required

Determine the break-even point in units and dollars using each of the following approaches:

1. Use the equation method.

2. Use the contribution margin per unit approach.

3. Prepare a contribution margin income statement for the break-even sales volume.