Blackmon Manufacturing: Break-Even Point
Not what you're looking for?
Blackmon Manufacturing Company makes a product that it sells for $50 per unit. The company incurs variable manufacturing costs of $14 per unit. Variable selling expenses are $6 per unit, annual fixed manufacturing costs are $189,000, and fixed selling and administrative costs are $141,000 per year.
Determine the break even point in units and dollars using each of the following approaches.
A. Equation Method
B. Contribution margin per unit
C. Contribution margin ratio
D. Confirm your results by preparing a contribution margin income statement for the break-even sales volume.
Please show the work.
Purchase this Solution
Solution Summary
This solution explains how to determine the break even point in units and dollars using each of the following approaches: Equation Method, Contribution margin per unit and the Contribution margin ratio. This is all completed in just over 160 words.
Solution Preview
Determine the break even point in units and dollars using each of the following approaches.
A. Equation Method
Let X be equal to number of break even units sold.
50X - (14 + 6)X - 189,000 - 141,000 = 0
30X - 330,000 = 0
X = 11,000 units
Break even in dollars = 11,000 x $50 = ...
Purchase this Solution
Free BrainMass Quizzes
Managing the Older Worker
This quiz will let you know some of the basics of dealing with older workers. This is increasingly important for managers and human resource workers as many countries are facing an increase in older people in the workforce
IPOs
This Quiz is compiled of questions that pertain to IPOs (Initial Public Offerings)
Team Development Strategies
This quiz will assess your knowledge of team-building processes, learning styles, and leadership methods. Team development is essential to creating and maintaining high performing teams.
Six Sigma for Process Improvement
A high level understanding of Six Sigma and what it is all about. This just gives you a glimpse of Six Sigma which entails more in-depth knowledge of processes and techniques.
Basics of corporate finance
These questions will test you on your knowledge of finance.