Refer to Exercise 21- 10.
In 21-10, Blanchard Company manufactures a single product that sells for $ 180 per unit and whose total variable costs are $ 135 per unit. The company’s annual fixed costs are $ 562,500.
(1) Prepare a contribution margin income statement for Blanchard Company showing sales, variable costs, and fixed costs at the break-even point.
(2) If the company’s fixed costs increase by $ 135,000, what amount of sales (in dollars) is needed to break even? Explain.