Ritchie Manufacturing Company makes a product that it sells for $140 per unit. The company...
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Accounting
Ritchie Manufacturing Company makes a product that it sells for $140 per unit. The company incurs variable manufacturing costs of $78 per unit. Variable selling expenses are $13 per unit, annual fixed manufacturing costs are $350,000, and fixed selling and administrative costs are $149,800 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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Prepare a contribution margin income statement for the break-even sales volume
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Determine the break-even point in units and dollars using the equation method and the contribution margin per unit approach.
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