P19-2BAll 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 expensesfixed 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. Problem 19-2B (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 - Problem 19-3B P19-3B Olgivie Company had a bad year in 2016. For the first time in its history, operated at a loss. The company's income statement showed the following results from selling 60.000 units of product sales $1.800.000 total costs and expenses $2010,000, and net loss $210.000. Costs and expenses consisted of the amounts shown below Cost of goods sold Selling expenses Administrative expenses Total $1,350 000 480.000 __180.000 52010000 Variable $ 930.000 125,000 115.000 $1.170.000 Fixed $420 000 355,000 65.000 $840.000 Management is considering the following independent alternatives for 2017 1. Increase unit selling price 25% with no change in costs, expenses, and sales volume 2. Change the compensation of salespersons from fixed annual salaries totaling $200 000 to total salaries of $20 000 plus a 5% commission on net sales 3. Purchase new high-tech factory machinery that will change the proportion between variable and fixed cost of goods sold to 50:50 Instructions (a) Compute the break-even point in dollars for 2016 (b) Compute the break-even point in dollars under each of the alternative courses of action (Round all ratios to nearest full percent) Which course of action do you recommend? (0) FYI: Sales were $1.800.000 and variable expenses were 1.170,000, which means contribution margin was $630,000 and CM ratio was 3596 (-1) FYI: The effect of this alternative is to increase the selling price per unit to $37.50 ($30 X 125%). 16-2) FYI: The effects of this alternative are to change total fixed costs to $660.000 (3840,000 - $180,000) and to change the contribution margin to.30 $1,800,000 - $1,170,000 - $90,000) $1,800,000) (D-3) FYI: The effects of this alternative are:(1) variable and fried cost of goods sold become 5675,000 each, (2) total variable costs become 5915,000 (5675,000+ $125,000+ $115,000), and (3) total fixed costs are $1.095,000 (5675,000 $355,000+ $65.000). Show your calculation