a) Break Even Points = Fixed Cost / (Selling Price - Variable Cost) = 100000 /(1-0.20) =125000 Bottles

b) Required sales =( Fixed cost + Target profit) / Contribution margin per unit = (100000+15000) /0.8=143750

c) Margin Of Safety= Actual sales units - Break even in units = 200000-125000=75000

1.Below are production costs and inventory information for Fitness Inc in 2020: Costs incurred: Raw materials purchases $88,000 Direct labour 42,000 Factory rent 8,000 Factory utilities 2,000 Indirect materials 4,000 (inventoried separately from other materials) Indirect labour 6,000 Selling expenses 5,000 Administrative expenses 12,000 Inventories: January 1, 2020 December 31, 2020 Raw materials $8,000 $ 7,000 Work in process 15,000 13,000 Finished goods 16,000 12,000 Prepare a schedule of Cost of Goods Manufactured for Fitness Inc for the year ended December 31, 2016 in good form. (30 Points) Enter your answer

2.Fred is thinking of entering the soft drinks market in the area surrounding his cottage. He is going to call his company Pops Pop. He realizes that the soft drink industry is dominated by only three companies that keep the competition out by spending a great deal on advertising. Nonetheless, Fred is tempted by the high profit margin. He plans to sell his cola for a dollar per bottle. Variable costs are $0.20 per bottle. His fixed costs are estimated at $100,000. He currently has the capacity to make and sell 200,000 bottles in a summer. In order to justify spending his time on this venture, rather than sitting on his dock, Fred needs to have an operating income of $15,000.

a. What is Freds break even in units?

b. How many bottles must Fred sell to achieve his target income of $15,000?

c. What is the margin of safety in dollar?Immersive Reader