1. Ripple Company bottles and distributes Ripple Fizz, a flavored wine beverage. The beverage is sold for P1 per 8-ounce bottle to retailers. Management estimates the following revenues and costs at 100% of capacity. (30 points)

Net sales P2,100,000 Selling expenses-variable P90,000

Direct materials 500,000 Selling expenses-fixed 70,000

Direct labor 300,000 Administrative expenses-variable 20,000

Manufacturing overhead-variable 350,000 Administrative expenses-fixed 50,000

Manufacturing overhead-fixed 275,000

Instructions:

1. How much is net income for the year using the CVP approach?
2. Compute the break-even point units and dollars.
3. How much is the contribution margin ratio?