Cpute the break-even point in 1 units and2 dollars

Reference no: EM13481822

Utech Company bottles and distributes Livit, 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 2008, management estimates the following revenues and costs.

Net sales	$1,800,000	Selling expenses-variable	$70,000
Direct materials	430,000	Selling expenses-fixed	65,000
Direct labor	352,000	Administrative expenses-variable	20,000
Manufacturing overhead-variable	316,000	Administrative expenses-fixed	60,000
Manufacturing overhead-fixed	283,000

Prepare a CVP income statement for 2008 basedon management's estimates. (List amounts from largest to smallesteg 10, 5, 3, 2.)

UTECH COMPANY
CVP Income Statement(Estimated)
For the YearEnding December 31, 2008
Net sales	$ 1,800,000
Variable expenses
Cost of goodssold	$ 1,098,000
Sellingexpenses	70,000
Administrativeexpenses	20,000
Total variable expenses	1,188,000
Contribution margin	612,000
Fixed expenses
Cost of goodssold	283,000
Sellingexpenses	65,000
Administrativeexpenses	60,000
Total fixedexpenses	408,000
Net income	$ 204,000

Compute the break-even point in (1) units and(2) dollars. Compute the contribution margin ratio and the margin of safety ratio.

Reference no: EM13481822

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