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Compute the breakeven points in units and in dollars

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Reference no: EM132532542

Question - Garnet bottles and distributes a diet soft drink. The beverage is sold for 50 cents per 16-ounce bottle to retailers, who charge customers 75 cents per bottle. For the year 2016, 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

Required -

a. Compute the breakeven points in units and in dollars.

b. Compute the contribution margin ratio and the margin of safety ratio.

c. Determine the sales dollars required to earn net income of $180,000.

Reference no: EM132532542

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