Xcite Equipment Co. manufactures and markets a number of rope products. Management is considering the future of Product XT, a special rope for hang gliding, that has not been as profitable as planned. Since Product XT is manufactured and marketed independently of the other products, its total costs can be precisely measured. Next years plans call for a $320 selling price per 100 yards of XT rope. Its fixed costs for the year are expected to be $316,800, up to a maximum capacity of 550,000 yards of rope. Forecasted variable costs are $224 per 100 yards of XT rope.

3. Prepare a contribution margin income statement showing sales, variable costs, and fixed costs for Product XT at the break-even point. XCITE EQUIPMENT CO Contribution Margin Income Statement (at Break-Even)-Product XT Units s per unit Total Contribution margin