ULRIKE Company bottles and distributes Apfelsaft, a childrens drink. The beverage is sold for 50 cents per 16-ounce bottle to retailers, who charges customers 70 cents per bottle. For the year 2018, management estimates the following revenues and costs.

Sales	$2,500,000
Direct Materials	360,000
Direct Labor	450,000
Manufacturing overhead variable	270,000
Manufacturing overhead fixed	380,000
Selling expenses variable	80,000
Selling expenses fixed	250,000
Administrative expenses variable	40,000
Administrative expenses fixed	150,000

Instructions

1. Prepare a CVP income statement for 2018 based on managements estimates (show column for total amounts only).
2. Compute the break-even point in (1) units and (2) dollars.
3. Compute the contribution margin ratio and the margin of safety ratio (round to nearest full percent).
4. Determine the sales dollars required to earn net income of $624,000.