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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.

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