Reid Company is considering the production of a new product. The expected variable cost is $27 per unit. Annual fixed co expected to be $810,000. The anticipated sales price is $72 each. Required Determine the break-even point in units and dollars using each of the following: a. Use the equation method. b. Use the contribution margin per unit approach. c. Use the contribution margin ratio approach. (Do not round intermediate calculations. Round "Contribution margin rat decimal place. (i.e., 0.234 should be entered as 23.4)) 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 C. Contribution margin ratio Break-even point in units Break-even point in dollars 18,000 $ 1,296,000 %
Reid Company is considering the production of a new product. The expected variable cost is $27 per unit. Annual fixed co expected to be $810,000. The anticipated sales price is $72 each. Required Determine the break-even point in units and dollars using each of the following: a. Use the equation method. b. Use the contribution margin per unit approach. c. Use the contribution margin ratio approach. (Do not round intermediate calculations. Round "Contribution margin rat decimal place. (i.e., 0.234 should be entered as 23.4)) 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 C. Contribution margin ratio Break-even point in units Break-even point in dollars 18,000 $ 1,296,000 %
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Transcribed Image Text:Reid Company is considering the production of a new product. The expected variable cost is $27 per unit. Annual fixed co
expected to be $810,000. The anticipated sales price is $72 each.
Required
Determine the break-even point in units and dollars using each of the following:
a. Use the equation method.
b. Use the contribution margin per unit approach.
c. Use the contribution margin ratio approach. (Do not round intermediate calculations. Round "Contribution margin rat
decimal place. (i.e., 0.234 should be entered as 23.4))
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
Contribution margin ratio
Break-even point in units
Break-even point in dollars
C.
$
18,000
1,296,000
%
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