Question
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:
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Use the equation method.
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Use the contribution margin per unit approach.
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Use the contribution margin ratio approach.
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Prepare a contribution margin income statement for the break-even sales volume.
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