Jorge Company bottles and distributes B-Lite, a diet soft drink. The beverage is sold for 50 cents per 16-ounce bottle to retailers. For the year 2022, management estimates the following revenues and costs.

Sales$1,800,000Selling expensesvariable$70,000Direct materials430,000Selling expensesfixed65,000Direct labor360,000Administrative expensesvariable20,000Manufacturing overheadvariable380,000Administrative expensesfixed60,000Manufacturing overheadfixed280,000

Instructions

1. Prepare a CVP income statement for 2022 based on management's estimates. (Show column for total amounts only.)
2. Compute the break-even point in (1) units and (2) dollars.
3. b. (1) 2,700,000 units
4. Compute the contribution margin ratio and the margin of safety ratio. (Round to nearest full percent.)
5. c. CM ratio 30%
6. Determine the sales dollars required to earn net income of $180,000.

Compute break-even point under alternative courses of action.