Question

In: Accounting

Ritchie Manufacturing Company makes a product that it sells for $140 per unit. The company incurs...

Ritchie Manufacturing Company makes a product that it sells for $140 per unit. The company incurs variable manufacturing costs of $73 per unit. Variable selling expenses are $11 per unit, annual fixed manufacturing costs are $468,000, and fixed selling and administrative costs are $271,200 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


Related Solutions

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: Use the equation method. Use the contribution margin per unit approach. Prepare a contribution margin income statement for the...
Ritchie Manufacturing Company makes a product that it sells for $190 per unit. The company incurs...
Ritchie Manufacturing Company makes a product that it sells for $190 per unit. The company incurs variable manufacturing costs of $96 per unit. Variable selling expenses are $18 per unit, annual fixed manufacturing costs are $462,000, and fixed selling and administrative costs are $260,000 per year. Required 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...
Baird Manufacturing Company makes a product that sells for $75 30 per unit Manufacturing costs for the product
  Problem 11-23A (Algo) Absorption versus variable costing LO 11-4 Baird Manufacturing Company makes a product that sells for $75 30 per unit Manufacturing costs for the product amount to $26.00 per unit variable, and $74,520 feed. During the current accounting period, Baird made 3.600 units of the product and sold 3.200 units Selling and administrative expenses were zero."   Required a. Prepare an absorption costing income statement. b. Prepare a variable costing income statement. Complete this question by entering...
A company sells its product for $140 per unit and their fixed costs are $21,760 per...
A company sells its product for $140 per unit and their fixed costs are $21,760 per month. Suppose the company's break-even point is 340 units, then their variable cost per unit is
Merline Manufacturing makes its product for $55 per unit and sells it for $141 per unit....
Merline Manufacturing makes its product for $55 per unit and sells it for $141 per unit. The sales staff receives a 10% commission on the sale of each unit. Its December income statement follows. MERLINE MANUFACTURING Income Statement For Month Ended December 31, 2017 Sales $ 1,410,000 Cost of goods sold 550,000 Gross profit 860,000 Operating expenses Sales commissions (10%) 141,000 Advertising 222,000 Store rent 25,100 Administrative salaries 45,500 Depreciation—Office equipment 55,500 Other expenses 13,100 Total expenses 502,200 Net income...
Merline Manufacturing makes its product for $70 per unit and sells it for $132 per unit....
Merline Manufacturing makes its product for $70 per unit and sells it for $132 per unit. The sales staff receives a 10% commission on the sale of each unit. Its December income statement follows. MERLINE MANUFACTURING Income Statement For Month Ended December 31, 2019 Sales $ 1,320,000 Cost of goods sold 700,000 Gross profit 620,000 Operating expenses Sales commissions (10%) 132,000 Advertising 204,000 Store rent 24,200 Administrative salaries 41,000 Depreciation—Office equipment 51,000 Other expenses 12,200 Total expenses 464,400 Net income...
Merline Manufacturing makes its product for $70 per unit and sells it for $138 per unit....
Merline Manufacturing makes its product for $70 per unit and sells it for $138 per unit. The sales staff receives a 10% commission on the sale of each unit. Its December income statement follows. MERLINE MANUFACTURING Income Statement For Month Ended December 31, 2017 Sales $ 1,380,000 Cost of goods sold 700,000 Gross profit 680,000 Operating expenses Sales commissions (10%) 138,000 Advertising 216,000 Store rent 24,800 Administrative salaries 44,000 Depreciation—Office equipment 54,000 Other expenses 12,800 Total expenses 489,600 Net income...
Merline Manufacturing makes its product for $70 per unit and sells it for $138 per unit....
Merline Manufacturing makes its product for $70 per unit and sells it for $138 per unit. The sales staff receives a 10% commission on the sale of each unit. Its December income statement follows. MERLINE MANUFACTURING Income Statement For Month Ended December 31, 2017 Sales $ 1,380,000 Cost of goods sold 700,000 Gross profit 680,000 Operating expenses Sales commissions (10%) 138,000 Advertising 216,000 Store rent 24,800 Administrative salaries 44,000 Depreciation—Office equipment 54,000 Other expenses 12,800 Total expenses 489,600 Net income...
Merline Manufacturing makes its product for $65 per unit and sells it for $131 per unit....
Merline Manufacturing makes its product for $65 per unit and sells it for $131 per unit. The sales staff receives a 10% commission on the sale of each unit. Its December income statement follows. MERLINE MANUFACTURING Income Statement For Month Ended December 31, 2017 Sales $ 1,310,000 Cost of goods sold 650,000 Gross profit 660,000 Operating expenses Sales commissions (10%) 131,000 Advertising 202,000 Store rent 24,100 Administrative salaries 40,500 Depreciation—Office equipment 50,500 Other expenses 12,100 Total expenses 460,200 Net income...
Nike makes shoes that sells 130 dollars per unit and incurs 66 dollars for variable manufacturing...
Nike makes shoes that sells 130 dollars per unit and incurs 66 dollars for variable manufacturing cost of 66 dollars per unit. The variable selling expense is 12 dollars per unit, annual fixed manufacturing costs are $450,000 and administrative/fixed selling are $226,000 per year. Find the break even point in units and dollars using… Equation method Contribution margin per unit approach Contribution margin ratio approach Prepare contribution margin income statement for the break even sales volume. 1. Break-even point in...
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT