Wilks Company bottles and distributes No-FIZZ, a fruit drink. The beverage is sold for 50 cents per 16 -ounce bottle to retailers, who charge customers 70 cents per bottle. For the year 2010, management estimates the following revenues and costs.

Instructions:

(a) Prepare a CVP income statement for 2010 based on management's estimates.

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

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

(d) Determine the sales dollars required to earn net income of \(\$ 272,000\).

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Net sales $2,000,000 Direct materials 360,000 Selling expenses-variable Selling expenses-fixed $ 100,000 150,000 Direct labor 590,000 Administrative expenses- Manufacturing overhead- variable 40,000 variable 270,000 Administrative expenses- Manufacturing overhead- fixed 78,000 fixed 220,000