Objective: Upon completion of this activity, the student will be able to: Prepare a CVP income statement, compute the break-even point, contribution margin ratio, the margin of safety ratio, and sales for target net income. P18-2B All Frute Company bottles and distributes Frute Ade, a fruit drink. The beverage is sold for 50 cents per 16-ounce bottle to retailers, who charge customers 70 cents per bottle. For the year 2014, management estimates the following revenues and costs. Sales $2,500,000 Direct materials 360,000 Direct labor 450,000 Selling expenses-variable Selling expenses-fixed Administrative expenses $ 80,000 250,000 Manufacturing overhead- variable 40,000 variable 270,000 Administrative expenses Manufacturing overhead- fixed 150,000 fixed 380,000 Figure 24: Problem 18-2B.Kieso, D. E., Kimmel, P.D., & Weygandt, J.J. (2013) Student Instructions: 1. Prepare a CVP income statement for 2014 based on management's estimates. (Show column for total amounts only.) 2. Compute the break-even point in (1) units and (2) dollars. 3. Compute the contribution margin ratio and the margin of safety ratio. 4. Determine the sales dollars required to earn a net income of $624,000.