Determining the break-even point and preparing a contribution margin income statement Inman Manufacturing Company makes a product that it sells for $60 per unit. The company in- curs variable manufacturing costs of $24 per unit. Variable selling expenses are $12 per unit, annual fixed manufacturing costs are $189,000, and fixed selling and administrative costs are $141,000 per year.Required Determine the break-even point in units and dollars using each of the following approaches: Equation method. Contribution margin per unit. Contribution margin ratio. Confirm your results by preparing a contribution margin income statement for the break- even sales volume.
Determining the break-even point and preparing a contribution margin income statement
Inman Manufacturing Company makes a product that it sells for $60 per unit. The company in- curs variable manufacturing costs of $24 per unit. Variable selling expenses are $12 per unit, annual fixed manufacturing costs are $189,000, and fixed selling and administrative costs are
$141,000 per year.
RequiredDetermine the break-even point in units and dollars using each of the following approaches:
-
Equation method.
-
Contribution margin per unit.
-
Contribution margin ratio.
-
Confirm your results by preparing a contribution margin income statement for the break- even sales volume.
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