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Break-Even Point in Units Chillmax Company plans to sell 3,500 pairs of shoes at 560 each in the coming year. Unit variable cost is $21 (includes direct materials, direct labor, variable factory overhead, and variable selling expense). Total fixed cost equals $78,000 (includes fixed factory overhead and fixed selling and administrative expense). Required: Question Content Area 1. Calculate the break-even pairs of shoes Feedback Area Feedback At the break-even point, operating income equals 50. The break-even point tells managers how many units must be sold to cover all costs. Once more than the break-even units are sold, the company begins to earn a profit. So to get the break-even units using the operating income statement, we set operating income to zero, and then solve for the number of units Break-Even Units = Total Fixed Cost (Price - Variable cost per unit) Review the "How to Calculate the Break-Even Point in Units example in your text. Question Content Area 2 Check your answer by preparing a contribution margin income statement based on the break-even units. Enter all amounts as a positive number. blank Total blank blank Sfill in the blank 28df3df7602bfe9_1 blank blank fill in the blank 28df3df7602bfe9_2 blank blank Shill in the blank 28df3df7602bfe9_3 blank blank fill in the blank 28df3df7602bfe9_4 Still in the blank 28df3df7602bfe9_5 blank blank Sales Total variable cost Total contribution margin Total fixed cost Operating income

Break-Even Point in Units Chillmax Company plans to sell 3,500 pairs of shoes at 560 each in the coming year. Unit variable cost is $21 (includes direct materials, direct labor, variable factory overhead, and variable selling expense). Total fixed cost equals $78,000 (includes fixed factory overhead and fixed selling and administrative expense). Required: Question Content Area 1. Calculate the break-even pairs of shoes Feedback Area Feedback At the break-even point, operating income equals 50. The break-even point tells managers how many units must be sold to cover all costs. Once more than the break-even units are sold, the company begins to earn a profit. So to get the break-even units using the operating income statement, we set operating income to zero, and then solve for the number of units Break-Even Units = Total Fixed Cost (Price - Variable cost per unit) Review the "How to Calculate the Break-Even Point in Units example in your text. Question Content Area 2 Check your answer by preparing a contribution margin income statement based on the break-even units. Enter all amounts as a positive number. blank Total blank blank Sfill in the blank 28df3df7602bfe9_1 blank blank fill in the blank 28df3df7602bfe9_2 blank blank Shill in the blank 28df3df7602bfe9_3 blank blank fill in the blank 28df3df7602bfe9_4 Still in the blank 28df3df7602bfe9_5 blank blank Sales Total variable cost Total contribution margin Total fixed cost Operating income

Managerial Accounting: The Cornerstone of Business Decision-Making
Managerial Accounting: The Cornerstone of Business Decision-Making
7th Edition
ISBN:9781337115773
Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Chapter7: Cost-volume-profit Analysis
Section: Chapter Questions
Problem 26BEB: Variable Cost Ratio, Contribution Margin Ratio Chillmax Company plans to sell 3,500 pairs of shoes...
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Break-Even Point in Units Chillmax Company plans to sell 3,500 pairs of shoes at $60 each in the coming year. Unit variable cost is $21 (includes direct materials, direct labor, variable factory overhead, and variable selling expense). Total fixed cost equals $78,000 (includes fixed factory overhead and fixed selling and administrative expense). Required: Question Content Area 1. Calculate the break-even pairs of shoes. Feedback Area Feedback At the break-even point, operating income equals So. The break-even point tells managers how many units must be sold to cover all costs. Once more than the break-even units are sold, the company begins to earn a profit. So to get the break-even units using the operating income statement, we set operating income to zero, and then solve for the number of units. = Total Fixed Cost Break-Even Units (Price - Variable cost per unit) Review the "How to Calculate the Break-Even Point in Units" example in your text. Question Content Area 2. Check your answer by preparing a contribution margin income statement based on the break-even units. Enter all amounts as a positive number. blank Total blank blank Sales Total variable cost Total contribution margin Total fixed cost Operating income Sfill in the blank 28df3df7602bfe9_1 blank blank fill in the blank 28df3df7602bfe9_2 blank blank Sfill in the blank 28df3df7602bfe9_3 blank blank fill in the blank 28df3df7602bfe9_4 Sfill in the blank 28df3df7602bfe9_5 blank blank
Transcribed Image Text:Break-Even Point in Units Chillmax Company plans to sell 3,500 pairs of shoes at $60 each in the coming year. Unit variable cost is $21 (includes direct materials, direct labor, variable factory overhead, and variable selling expense). Total fixed cost equals $78,000 (includes fixed factory overhead and fixed selling and administrative expense). Required: Question Content Area 1. Calculate the break-even pairs of shoes. Feedback Area Feedback At the break-even point, operating income equals So. The break-even point tells managers how many units must be sold to cover all costs. Once more than the break-even units are sold, the company begins to earn a profit. So to get the break-even units using the operating income statement, we set operating income to zero, and then solve for the number of units. = Total Fixed Cost Break-Even Units (Price - Variable cost per unit) Review the "How to Calculate the Break-Even Point in Units" example in your text. Question Content Area 2. Check your answer by preparing a contribution margin income statement based on the break-even units. Enter all amounts as a positive number. blank Total blank blank Sales Total variable cost Total contribution margin Total fixed cost Operating income Sfill in the blank 28df3df7602bfe9_1 blank blank fill in the blank 28df3df7602bfe9_2 blank blank Sfill in the blank 28df3df7602bfe9_3 blank blank fill in the blank 28df3df7602bfe9_4 Sfill in the blank 28df3df7602bfe9_5 blank blank
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