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Part 2: Exercise 11. All Frute Company bottles and distributes a type of cooking oil. The oil is sold for 60 cents per can
Part 2: Exercise 11. All Frute Company bottles and distributes a type of cooking oil. The oil is sold for 60 cents per can to retailers, who charge customers 70 cents per can. For the year 2014, management estimates the following revenues and costs. Sales Direct materials Direct labor Manufacturing overhead-variable Manufacturing overhead-fixed Instructions $3,200,000 400,000 500,000 370,000 380,000 Selling expenses-variable Selling expenses-fixed Administrative expenses variable Administrative expenses-fixed (a) Prepare a CVP income statement for 2014 based on management's estimates: $120,000 250,000 150,000 100,000 Sales Variable cost Contribution margin Fixed cost $'000 Net income (b) Compute the break-even point in (1) units and (2) dollars. Unit contribution margin Break-even point in units= 2 $'000
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