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Michel bottles and distributes B-Lite, a diet soft drink. Price per bottle is expected to be $1.20 For the year 2022, M company management estimates
Michel bottles and distributes B-Lite, a diet soft drink. Price per bottle is expected to be | $1.20 | ||||||||||
For the year 2022, M company management estimates the following revenues and expenses: | |||||||||||
Sales | $2,280,000 | Selling expenses - variable | $110,000 | ||||||||
Direct materials | 540,000 | Selling expenses - fixed | 65,000 | ||||||||
Direct labor | 550,000 | Administrative expenses - variable | 30,000 | ||||||||
Manufacturing overhead- variable | 480,000 | Administrative expenses - fixed | 65,000 | ||||||||
Manufacturing overhead -fixed | 350,000 | ||||||||||
(a) | Prepare a CVP income statement for 2022 based on management estimates. | ||||||||||
(b) | Compute the break-even point in (1) units and (2) dollars. | ||||||||||
(c ) | Compute the contribution margin ratio and the margin of safety ratio. | ||||||||||
(d) | Determine the sales dollars required to earn net income of: | $ 150,000 | |||||||||
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