Answered step by step
Verified Expert Solution
Question
00
1 Approved Answer
P19-2B 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
P19-2B 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 2017, management estimates the following revenues and costs. Sales $2,500,000 Selling expenses-variable $ 80,000 Direct materials 360,000 Selling expenses-fixed 250,000 Direct labor 450,000 Admin Expense - variable 40,000 Mfg Overhead - variable 270,000 Admin Expenses - fixed 150,000 Mfg Overhead - fixed 380,000 Instructions (a) Prepare a CVP Income statement for 2017 based on management's estimates. (Show column for total amounts only.) (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 $624,000. English (United States) Focus (a) ALL FRUTE COMPANY CVP Income Statement (Estimated) For the Year Ending December 31, 2016 2,500,000 Sales Variable Expenses: Total Variable Expenses Contribution Margin Fixed Expenses: Total Fixed Expenses Net Income (1) Direct materials $360,000+ direct labor $450,000+ variable manufacturing overhead $270,000. (b) Variable costs Total fixed costs 1) Breakeven in units 2) Breakeven in dollars (c) Contribution margin ratio. Margin of safety ratio Required sales
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access with AI-Powered Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started