Question

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Ritchie Manufacturing Company makes a product that it sells for $130 per unit. The company incurs...

Ritchie Manufacturing Company makes a product that it sells for $130 per unit. The company incurs variable manufacturing costs of $66 per unit. Variable selling expenses are $12 per unit, annual fixed manufacturing costs are $450,000, and fixed selling and administrative costs are $226,000 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.

Solutions

Expert Solution

ekkarill92 answered 2 years ago
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