Problem
Jorge Company bottles and distributes B-Lite, a diet soft drink. The beverage is sold for 60 cents per 16-ounce bottle to retailers, who charge customers 90 cents per bottle. For the year 2017, management estimates the following revenues and costs.
a.) Prepare a CVP income statement for 2017 based on management estimates.
b.) Calculate variable cost per bottle
c.) Compute the break even point in (1) units and (2) dollars
c.) Compute the contribution margin ratio and the margin of safety ratio
d.) Determine the sales dollars requested to earn net income of $41,600.
|
Sales
|
$2,064,000
|
Selling expenses-variable
|
$70,000
|
|
Direct materials
|
440,000
|
Selling expenses-fixed
|
45,000
|
|
Direct labor
|
300,000
|
Administrative expenses-variable
|
68,400
|
|
Manufacturing overhead-variable
|
360,000
|
Administrative expenses-fixed
|
52,000
|
|
Manufacturing overhead-fixed
|
637,400
|
|
|