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Up to question number 5 on page 64 please. thank you CVP-Review Problem The Julius Cease Her Company produces a very popular cologne called Cleo
Up to question number 5 on page 64 please. thank you
CVP-Review Problem The Julius Cease Her Company produces a very popular cologne called "Cleo Patra". The cologne con- sists of two main ingredients-2-22 Bacteria Fighter and Essence of Repel . The cologne sells for 516 per bottle. Other relevant cost information pertaining to the manufacturing of the product is given below. Cost Per Bottle 2-22 Bacteria Fighter $1.00 Essence of Repel 2.00 Direct labor costs 3.25 Variable overhead 3.25 Fixed overhead $40,000 The company also incurs selling and administrative costs of $1.50 per bottle and has fixed selling and administrative costs of $20,000 in total. Present sales are 20.000 bottles, Required: (Show all work) 1. Compute the company's contribution margin (CM) per unit, Contribution Margin S 2. Compute the company's contribution margin ratio. CM Ratio 3. Compute the company's break-even point in units. BEU 4. Using your answer from (2) above, prepare a Contribution Income Statement for the company at the break even level of units. Sales Less: Total Variable Costs: Contribution Margins Less: Total Fixed Costs: Net Income S 5. How many units must the company sell to make a net income before taxes of $30,000? Equation Technique Unit Distribution Approach 6. Compute the margin of safety in dollars and in percentage terms. MSS MS E 7. List any four break-even assumptions 8. List any two limitations of the break-even model 64 Step by Step Solution
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