Question

Ritchie Manufacturing Company makes a product that it sells for $140 per unit. The company incurs variable manufacturing costs of $73 per unit. Variable selling expenses are $11 per unit, annual fixed manufacturing costs are $468,000, and fixed selling and administrative costs are $271,200 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. Prepare a contribution margin income statement for the break-even sales volume. Complete this question by entering your answers in the tabs below. Req A to B Req C Determine the break-even point in units and dollars using the equation method, the contribution margin per unit approach and the contribution margin ratio approach. 13,200 $ 1,848,000 56 13,200 S 1,848,000 a. Break-even point in units Break-even point in dollars b. Contribution margin per unit Break-even point in units Break-even point in dollars

Answer 1

Question is asking for Contribution margin income statement at breakeven point which is given below

Contribution Margin Income Statement
Sales	$   18,48,000.00
Less: Variable Cost	$   11,08,800.00
Contribution Margin	$     7,39,200.00
Less: Fixed Cost	$     7,39,200.00
Net Operating Income	$             0.00

Sales = 13200 units x $140

Variable cost = 13200 x (11+73}