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 78 cents per bottle. For the year 2014, management estimates the following revenues and costs.
Sales | $1,818,200 | Selling expensesvariable | $65,800 | |
Direct materials | 426,600 | Selling expensesfixed | 69,000 | |
Direct labor | 359,000 | Administrative expensesvariable | 89,658 | |
Manufacturing overheadvariable | 313,500 | Administrative expensesfixed | 64,900 | |
Manufacturing overheadfixed | 286,900 |
Required: a)- Prepare a CVP income statement for 2014 based on management's estimates. b)- Compute the break-even point in (1) units and (2) dollars. c)- Calculate the contribution margin ratio and the margin of safety ratio. d)- Determine the sales dollars required to earn net income of $239,500. Show your work.. |
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