Hytek Company bottles and distributes Livit, 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 2012, management estimates the following revenues and costs.
Net sales $1,800,000 Selling expenses—variable $70,000 Direct materials 430,000 Selling expenses—fi xed 65,000 Direct labor 352,000 Administrative expenses— Manufacturing overhead— variable 20,000 variable 316,000 Administrative expenses— Manufacturing overhead— fi xed 60,000 fi xed 283,000 Instructions
(b) Compute the break-even point in (1) units and (2) dollars.
(c) Compute the contribution margin ratio and the margin of safety ratio. (Round to full percents.)
(d) Determine the sales dollars required to earn net income of $238,000.