Question
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
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 2017, management estimates the following revenues and costs.
Part A: Calculate variable cost per bottle.
Variable cost per bottle $____________
Part B: Compute the contribution margin ratio and the margin of safety ratio.
Contribution Margin Ratio ___________%
Margin of Safety Ratio __________ %
Part C: Determine the sales dollars required to earn net income of $180,000.
Required Sales Dollars $_________
Sales Direct materials Direct labor Manufacturing overhead-variable Manufacturing overhead-fixed $1,800,000 Sg expenses-variable 430,000 Selling expenses-fixed 360,000 Administrative expenses-variable 380,000 Administrative expenses-fixed 280,000 $70,000 65,000 20,000 60,000
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