Ritchie Manufacturing Company makes a product that it sells for $150 per unit. T

Question

Ritchie Manufacturing Company makes a product that it sells for $150 per unit. The company incurs variable manufacturing costs of $60 per unit. Variable selling expenses are $18 per unit, annual fixed manufacturing costs are $480,000, and fixed selling and administrative costs are $240,000 per year. Required Determine the break-even point in units and dollars using each of the following approaches a. Use the equation method b. Use the contribution margin per unit approach c. Use the contribution margin ratio approach d. Prepare a contribution margin income statement for the break-even sales volume Answer is complete but not entirely correct. Complete this question by entering your answers in the tabs below Req A to C Req D Prepare a contribution margin income statement for the break-even sales volume RITCHIE MANUFACTURING COMPANY Contribution Margin Income Statement Sales Variable costs Contribution margin Fixed costs Selling expenses Net income $ 1,500,000 780,000 720,000 480,000 240,000

Explanation / Answer

Contribution margin income statement ;

Sales 1500000 Variable costs 780000 Contribution margin 720000 Fixed cost 720000 Net income 0

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