Accounting GBA 5205

Problem 11-28 Determining the break-even point and preparing a contribution margin income statement LO 11-5 Ritchie Manufacturing Company makes a product that it sells for $150 per unit. The company incurs variable manufacturing costs of $60 per unit. Variable selling expenses are $18 per unit, annual fixed manufacturing costs are S480,000, and fixed selling and administrative costs are $240,000 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. Confirm your results by preparing a contribution margin income statement for the break-even CHECK FIGURE a. 10,000 units sales volume