P18.3

P18.3A (LO 3, 4, 5) Jorge Company bottles and distributes B-Lite, a diet soft drink. The beverage is sold for 50 cents per 16-ounce bottle to retailers. For the year 2020, management estimates the following revenues and costs. Sales $1,800,000 Selling expenses-variable $70,000 Direct materials 430,000 Selling expenses-fixed 65,000 Direct labor 360,000 Administrative expenses-variable 20,000 Manufacturing overhead-variable 380,000 Administrative expenses-fixed 60,000 Manufacturing overhead-fixed 280,000 Instructions a. Prepare a CVP income statement for 2020 based on management's estimates. (Show column for total amounts only.) b. Compute the break-even point in (1) units and (2) dollars. b. (1) units c. Compute the contribution margin ratio and the margin of safety ratio. (Round to nearest full percent.) c. CM ratio d. Determine the sales dollars required to earn net income of $180,000