Question

Blanchard Company manufactures a single product that sells for $120 per unit and whose total variable costs are $90 per unit. The company's annual fixed costs are $432,000. (1) Prepare a contribution margin income statement for Blanchard Company at the break-even point. BLANCHARD COMPANY Contribution Margin Income Statement at Break Even) Amount Percentage of sales (2) Assume the company's fixed costs increase by $129,000. What amount of sales in dollars) is needed to break even? Break Even Point in Dollars Choose Denominator Choose Numerator: Break Even Point in Dollars Break-even point in dollars

Answer 1

Solution -

Fixed cost 432000 Company Break even point in units Contribution margin/unit Break even units 30 (120-90) 14400 C F. 432000 Company Break even point in sales C margin ratio Break even sales in dollar 25% 1728000 Contribution margin income statement Particulars Amount (In $) % of sales Sales 1728000 100% Variable costs 1296000 75% Contribution margin 432000 25% Fixed costs 432000 Net Income 0 When fixed costs increse by $129000 Total fixes costs C margin ratio Break even sales in dollar 561000 25% 2244000