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.
![](/static/compass_v2/shared-icons/check-mark.png)
Trending now
This is a popular solution!
Step by step
Solved in 2 steps with 4 images
![Blurred answer](/static/compass_v2/solution-images/blurred-answer.jpg)
![Managerial Accounting: The Cornerstone of Busines…](https://www.bartleby.com/isbn_cover_images/9781337115773/9781337115773_smallCoverImage.gif)
![Managerial Accounting](https://www.bartleby.com/isbn_cover_images/9781337912020/9781337912020_smallCoverImage.jpg)
![Managerial Accounting: The Cornerstone of Busines…](https://www.bartleby.com/isbn_cover_images/9781337115773/9781337115773_smallCoverImage.gif)
![Managerial Accounting](https://www.bartleby.com/isbn_cover_images/9781337912020/9781337912020_smallCoverImage.jpg)
![Financial And Managerial Accounting](https://www.bartleby.com/isbn_cover_images/9781337902663/9781337902663_smallCoverImage.jpg)
![Cornerstones of Cost Management (Cornerstones Ser…](https://www.bartleby.com/isbn_cover_images/9781305970663/9781305970663_smallCoverImage.gif)