Ritchie Manufacturing Company makes a product that it sells for $190 per unit. The company incurs variable manufacturing costs of $96 per unit. Variable selling expenses are $18 per unit, annual fixed manufacturing costs are $462,000, and fixed selling and administrative costs are $260,000 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. Prepare a contribution margin income statement for the break-even sales volume.

Determine the break-even point in units and dollars and the contribution margin ratio approach. Break-even point in units a. Break-even point in dollars b. Contribution margin per unit Break-even point in units Break-even point in dollars RITCHIE MANUFACTURING COMPANY Contribution Margin Income Statement