1.Garnet bottles and distributes 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 2016, management estimates the following revenues and costs.

Sales

$1,800,000

Selling expenses-Variable

$70,000

Direct Materials

430,000

Selling expenses -Fixed

65,000

Direct Labor

360,000

Administrative expenses- Variable

20,000

Manufacturing Overhead- Variable

380,000

Administrative expenses - Fixed

60,000

Manufacturing Overhead -Fixed

280,000

Required:

a.Compute the breakeven points in unitsand in dollars

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

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