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Problem 3-17A (Algo) Determining the break-even point and preparing a contribution margin income statement LO 3-1 Ritchie Manufacturing Company makes a product that it sells

Problem 3-17A (Algo) Determining the break-even point and preparing a contribution margin income statement LO 3-1

Ritchie Manufacturing Company makes a product that it sells for $160 per unit. The company incurs variable manufacturing costs of $73 per unit. Variable selling expenses are $15 per unit, annual fixed manufacturing costs are $456,000, and fixed selling and administrative costs are $278,400 per year.

Required

Determine the break-even point in units and dollars using each of the following approaches:

  1. Use the equation method.

  2. Use the contribution margin per unit approach.

  3. Use the contribution margin ratio approach.

  4. Prepare a contribution margin income statement for the break-even sales volume.

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