APPLY THE CONCEPTS: Break-Even Point in Units The break-even point can be expressed in terms of sales dollars or number of units. The break-even units tells us how many units must be sold so that operating income is $0. Assume that you are part of the accounting team for Kolbe Manufacturing. The company currently expects to sell 842 units for total revenue of $21,450 each month. Kolbe Manufacturing estimates direct materials costs of $3,150, direct labor costs of $4,200, variable overhead costs of $2,100, and variable selling and administrative costs of $1,050. Fixed costs of $9,750 are also expected, which includes fixed overhead and selling and administrative costs. Using this information, complete the contribution margin income statement shown below. Kolbe Manufacturing Contribution Margin Income Statement Sales Less: Variable costs Contribution margin Less: Fixed costs Operating income Feedback Kolbe Manufacturing is examining cost behavior patterns. Your recommendation is to first determine the break-even point in units. First, calculate the contribution margin (CM) per unit (rounded to the nearest dollar). $ Next, complete the formula below to determine the break-even units. Total Fixed Costs / Contribution Margin per Unit = Units $ $ units