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— fixed 60,000
Fixed 283,000
Instructions
(a) Compute the break-even point in (1) units and (2) dollars.