Survey Of Accounting
5th Edition
ISBN: 9781259631122
Author: Edmonds, Thomas P.
Publisher: Mcgraw-hill Education,
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Question
Chapter 11, Problem 28P
a.
To determine
Calculate the break-even points using the equation method.
b.
To determine
Calculate the break-even point in dollars and units using contribution margin per unit approach.
c.
To determine
Calculate the contribution margin income statement for break-even sales volume to confirm the result.
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Ritchie Manufacturing Company makes a product that it sells for $180 per unit. The company incurs variable manufacturing costs of
$100 per unit. Variable selling expenses are $17 per unit, annual fixed manufacturing costs are $460,000, and fixed selling and
administrative costs are $195,200 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.
Complete this question by entering your answers in the tabs below.
Req A to C
Req D
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
a. Break-even point in dollars
b. Contribution margin per unit
b. Break-even point in units
b. Break-even point…
A company reports the following information for the single product it manufactures.
Sales price
Variable cost per unit
Total fixed costs
Target income
(a) Compute contribution margin per unit.
$ 230 per unit
$ 161 per unit
$ 986,700 per year
$572,700 per year
Contribution margin
(b) Compute the break-even point in units.
Numerator
(c) Compute the unit sales to earn the target income.
Numerator
Denominator
=
Break-Even Units
=
=
Break-even units
Denominator
=
Units to Achieve Target
=
Units to achieve target
Ritchie manufacturing company makes a product that it sells for $170 per unit. The company incurs variable manufacturing costs of $86 per unit variable selling expenses are 416 per unit, annual fixed manufacturing costs are $458,000, and fixed selling and administrative costs are $242,400 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) prepare a contribution margin income statement for the break-even sales volume.
Chapter 11 Solutions
Survey Of Accounting
Ch. 11 - 1.Define fixed cost and variable cost and give an...Ch. 11 - Prob. 2QCh. 11 - 3.Define the term operating leverage and explain...Ch. 11 - Prob. 4QCh. 11 - Prob. 5QCh. 11 - 6.If volume is increasing, would a company benefit...Ch. 11 - Explain the risk and rewards to a company that...Ch. 11 - 9.Are companies with predominately fixed cost...Ch. 11 - 10.How is the relevant range of activity related...Ch. 11 - Which cost structure has the greater risk?...
Ch. 11 - 14.The president of Bright Corporation tells you...Ch. 11 - Prob. 12QCh. 11 - Prob. 13QCh. 11 - Prob. 14QCh. 11 - Prob. 15QCh. 11 - Prob. 16QCh. 11 - Prob. 17QCh. 11 - Prob. 1ECh. 11 - Prob. 2ECh. 11 - Prob. 3ECh. 11 - Exercise 2-4A Determining total variable cost The...Ch. 11 - Prob. 5ECh. 11 - Prob. 6ECh. 11 - Prob. 7ECh. 11 - Prob. 8ECh. 11 - Prob. 9ECh. 11 - Prob. 10ECh. 11 - Prob. 11ECh. 11 - Prob. 12ECh. 11 - Prepare an income statement using the contribution...Ch. 11 - Prob. 14ECh. 11 - Prob. 15ECh. 11 - Prob. 16ECh. 11 - Prob. 17ECh. 11 - Prob. 18ECh. 11 - Prob. 19ECh. 11 - Prob. 20ECh. 11 - Prob. 21PCh. 11 - Prob. 22PCh. 11 - Problem 2-19A Context-sensitive nature of cost...Ch. 11 - Prob. 24PCh. 11 - Prob. 25PCh. 11 - Prob. 26PCh. 11 - Prob. 27PCh. 11 - Prob. 28PCh. 11 - Prob. 29PCh. 11 - Prob. 1ATCCh. 11 - Prob. 2ATCCh. 11 - Prob. 3ATCCh. 11 - Prob. 4ATCCh. 11 - Prob. 5ATC
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