Ritchie Manufacturing Company makes a product that it sells for $180 per unit. The company incurs variable manufacturing costs of $79 per unit. Variable selling expenses are $20 per unit, annual fixed manufacturing costs are $500,000, and fixed selling and administrative costs are $245,200 per year.

Required

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

Use the equation method.

Use the contribution margin per unit approach.

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