Part-a: : Computation of BEP in Equation ethod |
Fixed Cost = Sales- Variable Cost |
Let Sales = X |
(352000+266000)=150X-(76+14)X |
618000=60X |
X= 618000/60= 10300 Unit |
BEP in Unit= 10300 Unt |
BEP in $= 10300*$150=$1545000 |
Part-a: : Computation of BEP in Equation ethod |
Fixed Cost = Sales- Variable Cost |
Let Sales = X |
(352000+266000)=150X-(76+14)X |
618000=60X |
X= 618000/60= 10300 Unit |
BEP in Unit= 10300 Unt |
BEP in $= 10300*$150=$1545000 |
Part-b Contribution Margin per Unit Method |
CM per Unit= Selling Price- Variable cost per Unit |
$150- ($76+14)= $60 |
BEP in Unit= Fixed Cost/ CM per Unit |
618000/60= 10300 Unit |
BEP in $= 10300*$150=$1545000 |
Part-c Contrubiton Margin Ratio Method |
CM per Unit= Selling Price- Variable cost per Unit |
$150- ($76+14)= $60 |
CM Ratio= CM/ Sales= 60/150= 40% |
BEP in $= Fixed Cost/ CM Ratio |
618000/40%= $1545000 |
BEP in unit= 1545000*$150=$10300 |
Contribution margin Income statement | ||
Sales | $1,545,000.00 | |
Less: Variable cost | ||
Variable Manufacturing Cost | $782,800.00 | |
Variable selling Expense | $144,200.00 | |
Contribution margin | $927,000.00 | |
Less: Fixed Ccost | ||
Fixed Manufacturign Cost | $352,000.00 | |
Fixed Sellgn & Admin cost | $266,000.00 | $618,000.00 |
Net Income | $0.00 |
Ritchie Manufacturing Company makes a product that it sells for $150 per unit. The company incurs...
Ritchie Manufacturing Company makes a product that it sells for $150 per unit. The company incurs variable manufacturing costs of $76 per unit. Variable selling expenses are $14 per unit, annual fixed manufacturing costs are $352,000, and fixed selling and administrative costs are $266,000 per year. Required Determine the break-even point in units and dollars using each of the following approaches: a. Use the equation method. b. Use the contribution margin per unit approach. c. Use the contribution margin ratio...
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Ritchie Manufacturing Company makes a product that it sells for $160 per unit. The company incurs variable manufacturing costs of $73 per unit. Variable selling expenses are $15 per unit, annual fixed manufacturing costs are $490,000, and fixed selling and administrative costs are $258,800 per year. Required Determine the break-even point in units and dollars using each of the following approaches: Use the equation method. Use the contribution margin per unit approach. Use the contribution margin ratio approach. Prepare a...
Ritchie Manufacturing Company makes a product that it sells for $160 per unit. The company incurs variable manufacturing costs of $73 per unit. Variable selling expenses are $15 per unit, annual fixed manufacturing costs are $490,000, and fixed selling and E administrative costs are $258,800 per year. Required Determine the break-even point in units and dollars using each of the following approaches: E a. Use the equation method. b. Use the contribution margin per unit approach. c. Use the contribution...
Ritchie Manufacturing Company makes a product that it sells for $150 per unit. The company incurs variable manufacturing costs of $60 per unit. Variable selling expenses are $18 per unit, annual fixed manufacturing costs are $480,000, and fixed selling and administrative costs are $240,000 per year. C. Use the contribution margin ratio approach. Contribution margin ratio: ___% Break-even point in units: ___ Break-even point in dollars: $___