Lyman Company bottles and distributes Livit, 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 2012, management estimates the following revenues and costs.

Net sales$1,800,000 Selling expensesvariable$70,000 Direct materials430,000 Selling expensesfixed65,000 Direct labor352,000 Administrative expensesvariable20,000 Manufacturing overheadvariable316,000 Administrative expensesfixed60,000 Manufacturing overheadfixed283,000

Instructions

(a)	Prepare a CVP income statement for 2012 based on management's estimates.

(b)	Compute the break-even point in (1) units and (2) dollars. (b) (1) 2,400,000 units

(c)	Compute the contribution margin ratio and the margin of safety ratio. (Round to nearest full percent.) (c) CM ratio 34%

(d)	Determine the sales dollars required to earn net income of $238,000.