Jorge Company bottles and distributes B-Lite, 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 2014, management estimates the following revenues and costs.

Instructions

1. Prepare a CVP income statement for 2014 based on managements estimates. (Show column for total amounts only.)
2. Compute the break-even point in (1) units and (2) dollars.
3. Compute the contribution margin ratio and the margin of safety ratio. (Round to nearest full percent.)
4. Determine the sales dollars required to earn net income of $180,000.

\begin{tabular}{|c|c|c|} \hline Sales & $1,800,000 & Selling expenses-variable \\ \hline Direct materials & 430,000 & Selling expenses-fixed \\ \hline Direct labor & 360,000 & Administrative expenses- \\ \hline Manufacturing overhead- & & variable \\ \hline variable & 380,000 & Administrative expenses- \\ \hline \begin{tabular}{l} Manufacturing overhead- \\ fixed \end{tabular} & 280,00 & fixed \\ \hline \end{tabular}