Blanchard Company manufactures a single product that sells for $180 per unit and
ID: 2336236 • Letter: B
Question
Blanchard Company manufactures a single product that sells for $180 per unit and whose total varlable costs are $126 per unit. The company's annual fixed costs are $842.400. (1) Prepare a contribution margin Income statement for Blanchard Company at the break-even polnt. BLANCHARD COMPANY Contribution Margin Income Statement (at Break-Even) Percentage of sales Amount (2) Assume the company's fixed costs Increase by $141,000. What amount of sales (In dollars) is needed to break even? Break-Even Point in Dollars Choose Numerator: Choose Denominator:Break-Even Point in Dollars -Break-even point in dollarsExplanation / Answer
Break Even Point means Total expenses is equal to Total income i.e there is no profit and No loss Situation
Sales per Unit =$180 per unit
Variable Cost per unit=$126 Per unit
Contribution per Unit=$54 per unit
Fixed Cost=$842400
Sales Unit at Break Even Point =Fixed Cost/Selling price per unit-Variable cost per unit
=$842400/54=15600 Units
Contribution Income Statement of Blanchard company at break even Point
Particulars
Amount
% of Sales
Sales(15600*180)
2808000
100%
Less:variable Cost (15600*126)
-1965600
70%
Contribution
842400
30%
Less:Fixed Cost
842400
30%
Net Income
0
0%
2.
Break-even point in dollars
Choose Numerator
/
Choose Denominator
=
Break-even point in dollar
Total fixed cost
/
Contribution margin ratio
=
Break-even point in dollar
$983400
30%
$3278000
Total Fixed Cost=141000+ 842400=983400
Contribution Income Statement of Blanchard company at break even Point
Particulars
Amount
% of Sales
Sales(15600*180)
2808000
100%
Less:variable Cost (15600*126)
-1965600
70%
Contribution
842400
30%
Less:Fixed Cost
842400
30%
Net Income
0
0%
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