Acc202 Survey of Accounting: P11-28 Inman Manufacturing Company makes a product

Acc202 Survey of Accounting

P11-28 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 per year.

Required
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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