Ritchie Manufacturing Company makes a product that it sells for $180 per unit. The company incurs variable manufacturing costs of $100 per unit. Variable selling expenses are $17 per unit, annual fixed manufacturing costs are $460,000, and fixed selling and administrative costs are $195,200 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. Use the contribution margin ratio approach. d. Prepare a contribution margin income statement for the break-even sales volume. Complete this question by entering your answers in the tabs below.
Ritchie Manufacturing Company makes a product that it sells for $180 per unit. The company incurs variable manufacturing costs of $100 per unit. Variable selling expenses are $17 per unit, annual fixed manufacturing costs are $460,000, and fixed selling and administrative costs are $195,200 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. Use the contribution margin ratio approach. d. Prepare a contribution margin income statement for the break-even sales volume. Complete this question by entering your answers in the tabs below.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Transcribed Image Text:Ritchie Manufacturing Company makes a product that it sells for $180 per unit. The company incurs variable manufacturing costs of
$100 per unit. Variable selling expenses are $17 per unit, annual fixed manufacturing costs are $460,000, and fixed selling and
administrative costs are $195,200 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. Use the contribution margin ratio approach.
d. 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 C
Req D
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.
a. Break-even point in units
a. Break-even point in dollars
b. Contribution margin per unit
b. Break-even point in units
b. Break-even point in dollars
c. Contribution margin ratio
c. Break-even point in units
c. Break-even point in dollars
Ron A to C
< P.rev.
Req D >
15 of 16
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