Chillmax Company now sells both pairs of shoes and carryalls. Next year, Chillmax expects to produce total

Question:

Chillmax Company now sells both pairs of shoes and carryalls. Next year, Chillmax expects to produce total revenue of $210,000 and incur total variable cost of $81,375. Total fixed cost is expected to be $91,500.

Required:

1. Calculate the break-even point in sales dollars for Chillmax.

2. Check your answer by preparing a contribution margin income statement.

Contribution Margin
Contribution margin is an important element of cost volume profit analysis that managers carry out to assess the maximum number of units that are required to be at the breakeven point. Contribution margin is the profit before fixed cost and taxes...