Question
Johnson Company bottles ans distributes soft drinks. The beverage is sold for 60 cents per 16 ounce bottle to retailers who charge customers 75 cents
Johnson Company bottles ans distributes soft drinks. The beverage is sold for 60 cents per 16 ounce bottle to retailers who charge customers 75 cents per bottle. For the year 2020, management estimates the following revenues and costs.
Sales 1,800,000
Direct materials 510,000
Direct labor 390,000
Manufacturing overhead-variable 410,000
Manufacturing overhead-fixed 130,000
Selling expenses-variable 105,000
Selling expense-fixed 62,000
Administrative expense-variable 25,000
Administrative expense-fixed 96,000
Prepare a CVP income statement for 2020 based on management's estimates.
Then calculate variable cost per bottle
Variable cost per bottle $___________
Compute the break-even point in (1) units and (2) dollars:
(1) Compute break-even point
(2) Compute the break-even point
Compute the contribution margin ratio and the margin of safety ration:
Contribution margin ratio_________%
Margin of safety ratio____________%
Determine the sales dollars required to earn net income of $170,000
Required sales dollars $_______________
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