Reference no: EM132774139

Question - Jorge Company bottles and distributes B-Lite, a diet soft drink. The beverage is sold for 50 cents per 16-ounce bottle to retailers. For the year 2022, management estimates the following revenues and costs.

Sales $1,800,000

Selling expenses-variable $70,000

Direct materials 430,000

Selling expenses-fixed 65,000

Direct labor 360,000

Administrative expenses-variable 20,000

Manufacturing overhead-variable 380,000

Administrative expenses-fixed 60,000

Manufacturing overhead-fixed 280,000

Instructions -

1. Prepare a CVP income statement for 2022 based on management's 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 $180,000.

5. Compute break-even point under alternative courses of action.