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Determine the break-even point in units and dollars

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Reference no: EM131911412

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. Confirm your results by preparing a contribution margin income statement for the break-even sales volume.

Reference no: EM131911412

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