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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 $200 per unit. The company incurs variable manufacturing costs of $101 per unit. Variable selling expenses are $19 per unit, annual fixed manufacturing costs are $464,000, and fixed selling and administrative costs are $256,000 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.

Complete this question by entering your answers in the tabs below.

Determine the break-even point in units and dollars using the equation method, the contribution margin per unit approach and the contribution margin ratio approach.

A.	Break-even point in units
	Break-even point in dollars
B.	Contribution margin per unit
	Break-even point in units
	Break-even point in dollars

• Req C

Prepare a contribution margin income statement for the break-even sales volume.

Richie Manufacturing Company

Contribution Margin Income Statement
Cost of goods sold
Fixed costs
Sales
Selling expenses
Variable costs
Net Income or Net Loss

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