Reference no: EM132495762

Question - Carla Vista Company bottles and distributes B-Lite, 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 2020, management estimates the following revenues and costs.

Sales $2,000,000

Selling expenses-variable $109,000

Direct materials 550,000

Selling expenses-fixed 58,000

Direct labor 400,000

Administrative expenses-variable 21,000

Manufacturing overhead-variable 420,000

Administrative expenses-fixed 52,000

Manufacturing overhead-fixed 190,000

CVP income statement for 2020 based on management's estimates. Calculate variable cost per bottle. Compute the break-even point in (1) units and (2) dollars. Compute the contribution margin ratio and the margin of safety ratio. Determine the sales dollars required to earn net income of $190,000.