ROMALY Company bottles and distributes Frapes, a flavored summer beverage. The beverage is sold for $1.50 per 8-ounce bottle to retailers. Management estimates the following revenues and costs at 100% of capacity.

Net sales	$3,150,000	Selling expenses-variable	$110,000
Direct materials	600,000	Selling expenses-fixed	90,000
Direct labor	500,000	Administrative expenses-variable	100,000
Manufacturing overhead-variable	580,000	Administrative expenses-fixed	80,000
Manufacturing overhead-fixed	310,000

Instructions

How much is net income for the year using the CVP approach?

How much is the contribution margin ratio?

Compute the break-even point units and dollars.