Break - 450,000 Contribution Margin 300,000 Fixed Costs...

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Break-even point The break-even point represents the level of sales where net income equals zero. In other words, the  point where sales revenue equals total variable costs plus total fixed costs, and contribution margin  equals fixed costs. Using the previous information and given that the company has fixed costs of  $300,000, the break-even income statement shows zero net income.  The Three M's, Inc. Break-Even Income Statement Revenues (250,000 units × $3) $750,000 Variable Costs (250,000 units × $1.80)
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Unformatted text preview: 450,000 Contribution Margin 300,000 Fixed Costs 300,000 Net Income $ 0 This income statement format is known as the contribution margin income statement and is used for internal reporting only. The $1.80 per unit or $450,000 of variable costs represent all variable costs including costs classified as manufacturing costs, selling expenses, and administrative expenses. Similarly, the fixed costs represent total manufacturing, selling, and administrative fixed costs....
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