Schuch Company sells a single kind of product. In the current month the company sold a total of 18,900 units and earned $378,000 as sales. The variable cost per unit is $6.25. The company incurs a fixed cost of $170,500 per month.

Required:

1. How many units of product the company must sell to reach break- even point? What will be the

   break- even point in sales dollars? (6 marks)

2. Prepare the Contribution Margin Income Statement for Schuch Company. (3 marks)