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.

Instructions
(a) Prepare a CVP income statement for 2014 based on management's estimates. (Show column for total amounts only.)
(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 nearest full percent.)
(d) Determine the sales dollars required to earn net income of$180,000.

Transcribed Image Text:

1,800,000 Slling expenses-variable $70,000 Sales Direct materials Direct labor Manufacturing overhead- 65,000 20,000 60,000 430,000 Selng expenses-fixed Administrative expenses- 360,000 380,000 280,000 variable variable Administrative expenses- Manufacturing overhead fixed fixed