Lorge 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 2011, management estimates the following revenues and costs.
Net sales $1,800,000
Selling expenses-variable $70,000
Direct materials 430,000
Selling expenses-fixed 65,000
Direct labor 352,000
Administrative expenses-variable 20,000
Manufacturing overhead-variable 316,000
Administrative expenses-fixed 60,000
Manufacturing overhead-fixed 283,000