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Problem 11-28 Determining the break-even point and preparing a contribution margin income statement LO 11-5 Ritchie...

Problem 11-28 Determining the break-even point and preparing a contribution margin income statement LO 11-5

Ritchie Manufacturing Company makes a product that it sells for $150 per unit. The company incurs variable manufacturing costs of $67 per unit. Variable selling expenses are $14 per unit, annual fixed manufacturing costs are $454,000, and fixed selling and administrative costs are $277,400 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.

Problem 11-28 Determining the break-even point and preparing a contribution margin income statement LO 11-5

Ritchie Manufacturing Company makes a product that it sells for $150 per unit. The company incurs variable manufacturing costs of $67 per unit. Variable selling expenses are $14 per unit, annual fixed manufacturing costs are $454,000, and fixed selling and administrative costs are $277,400 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.

Problem 11-28 Determining the break-even point and preparing a contribution margin income statement LO 11-5

Ritchie Manufacturing Company makes a product that it sells for $150 per unit. The company incurs variable manufacturing costs of $67 per unit. Variable selling expenses are $14 per unit, annual fixed manufacturing costs are $454,000, and fixed selling and administrative costs are $277,400 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.

Problem 11-28 Determining the break-even point and preparing a contribution margin income statement LO 11-5

Ritchie Manufacturing Company makes a product that it sells for $150 per unit. The company incurs variable manufacturing costs of $67 per unit. Variable selling expenses are $14 per unit, annual fixed manufacturing costs are $454,000, and fixed selling and administrative costs are $277,400 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

The answer has been presented in the supporting sheet. All the parts has been solved with detailed explanation and calculation. For detailed answer refer to the supporting sheet.

ekkarill92 answered 1 year ago
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