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Ritchie Manufacturing Company makes a product that it sells for $160 per unit. The company...

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Accounting

Ritchie Manufacturing Company makes a product that it sells for $160 per unit. The company incurs variable manufacturing costs of $73 per unit. Variable selling expenses are $15 per unit, annual fixed manufacturing costs are $490,000, and fixed selling and administrative costs are $258,800 per year.

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.

A. Break even point in units

Break even point in dollars

Contribution margin per unit

B. Break even point in units

Break even point in dollars

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