Compute the contribution margin ratio

Question

Jorge Company bottles and distributes B-Lite, a diet soft drink. The beverage is sold for 50 cents per 16-ounce bottle to retailers, who charge customers 75 cents per bottle. For the year 2014, management estimates the following revenues and costs.

Prepare a CVP income statement for 2014 based on managemental estimates.

Sales                                            1,800,000

direct materials                                430,000

direct labor                                      360,000

manufacturing overhead- variable      380,000

manufacturing overhead- fixed          280,000

Selling expenses- variable                   70,000

Selling expenses- fixed                       65,000

Administrative expenses-                    20,000

Administrative expenses-                    60,000

1. calculate the variable cost per bottle. -round to 2 decimal places
2. Compute the break-even point in (1) units and (2) dollars. -round to 0 decimal places
3. Compute the contribution margin ratio and the margin of safety ratio. -round to 2 decimal places
4. Determine the sales dollars required to earn net income of $180,000. -round to 0 decimal places