Question - JTTM Corporation has been struggling with profitability and has hired you as an outside consultant to analyze the company's financial results from operations and provide recommendations on steps the company can take to become profitable. The following per unit information has been provided to you:
Sales $ 1,100
Variable expenses:
Direct labor 198
Direct material 220
Variable manufacturing overhead 132
Variable selling expenses 110
Fixed expenses:
Fixed manufacturing overhead 200
Fixed selling expenses 80
Fixed administrative expenses 175
The normal sales volume for JTTM Corporation is 4,000 units. The relevant range for these costs is 3,500 - 6,000 units.
Question: Calculate the break-even unit sales and break-even sales dollars using the formulas demonstrated in the text. Prepare a contribution margin income statement to support your break-even sales dollars.