Contribution margin income statement
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Inman Manufacturing Company makes a product that it sells for $60 per unit. The company incurs 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.
Determine the break-even point in units and dollars using 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
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Solution discusses the contribution margin income statement
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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 incurs 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 ...
Purchase this Solution
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