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.

Managerial Accounting: The Cornerstone of Business Decision-Making
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Chapter7: Cost-volume-profit Analysis
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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:

  1. Equation method.

  2. Contribution margin per unit.

  3. Contribution margin ratio.

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

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