Ritchie Manufacturing Company makes a product that it sells for $150 per unit. The company...
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Accounting
Ritchie Manufacturing Company makes a product that it sells for $150 per unit. The company incurs variable manufacturing costs of $76 per unit. Variable selling expenses are $14 per unit, annual fixed manufacturing costs are $352,000, and fixed selling and administrative costs are $266,000 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 break-even sales volume.
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