Question: Refer to Exercise.
(1) Prepare a contribution margin income statement for Apollo Company showing sales, variable costs, and fixed costs at the break-even point.
(2) If the company's fixed costs increase by $135,000, what amount of sales (in dollars) is needed to break even? Explain.
Exercise: Apollo Company manufactures a single product that sells for $168 per unit and whose total variable costs are $126 per unit. The company's annual fixed costs are $630,000.
(1) Use this information to compute the company's
(a) contribution margin,
(b) contribution margin ratio,
(c) break-even point in units, and
(d) break-even point in dollars of sales.