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 78 cents per bottle. For the year 2014, management estimates the following revenues and costs.

Sales		$ 1,805,800		Selling expensesvariable		$ 65,400
Direct materials		428,800		Selling expensesfixed		65,400
Direct labor		358,300		Administrative expensesvariable		47,386
Manufacturing overheadvariable		310,000		Administrative expensesfixed		60,200
Manufacturing overheadfixed		293,000

*(a)

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Prepare a CVP income statement for 2014 based on managements estimates.

JORGE COMPANY CVP Income Statement (Estimated) For the Year Ending December 31, 2014
Sales				$ 1805800
Variable Expenses
Cost of Goods Sold		$ 1097100
Selling Expenses		65400
Administrative Expenses		47386
Total Variable Expenses				1209886
Contribution Margin				595914
Fixed Expenses
Cost of Goods Sold		293,000
Selling Expenses		65400
Administrative Expenses		60200
Total Fixed Expenses				418600
Net Income/(Loss)				$

Attempts: 3 of 3 used

Variable Cost per Bottle: $ .34

Attempts: 3 of 3 used

Compute the break-even point in (1) units and (2) dollars. (Round answers to 0 decimal places, e.g. 1,225.)

(1)

Compute the break-even point

_____

units

(2

Determine the sales dollars required to earn net income of $ 241,100 . (Round answers to 0 decimal places, e.g. 1,225.)

Required sales dollars $______

__

Compute the contribution margin ratio and the margin of safety ratio. (Round answers to 0 decimal places, e.g. 25%.)

Contribution margin ratio			%
Margin of safety ratio			%

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