All Frute Company bottles and distributes Frute Ade, 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 2017, management estimates the following revenues and costs.

Sales	$2,500,000		Selling expensesvariable	$ 80,000
Direct materials	360,000		Selling expensesfixed	250,000
Direct labor	450,000		Admin Expense - variable	40,000
Mfg Overhead - variable	270,000		Admin Expenses - fixed	150,000
Mfg Overhead - fixed	380,000

Instructions

(a) Prepare a CVP income statement for 2017 based on managements 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.

(d) Determine the sales dollars required to earn net income of $624,000.

(a)

ALL FRUTE COMPANY CVP Income Statement (Estimated) For the Year Ending December 31, 2016
Sales		2,500,000
Variable Expenses:
Contribution Margin
Fixed Expenses:
Net Income

(1) Direct materials $360,000 + direct labor $450,000 + variable manufacturing overhead $270,000.

(b)

Variable costs =

Total fixed costs =

1) Breakeven in units =

2) Breakeven in dollars =

(c)

Contribution margin ratio =

Margin of safety ratio =

(d)

Required sales =