Jorge Company bottles and distributes B-Lite, a diet soft drink. The beverage is sold for 50 cents per 16-ounce bottle to retailers. For the year 2022, management estimates the following revenues and costs.

Instructions

a. Prepare a CVP income statement for 2022 based on management’s estimates. Include columns for per unit and percent of sales information.

b. Compute the break-even point in (1) sales units and (2) sales dollars.

c. Compute the contribution margin ratio and the margin of safety ratio.

d. Determine the sales dollars required to earn net income of $180,000.

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