Reference no: EM132732101
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.