Reference no: EM132685905

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 materials430,000 

Selling expenses-fixed65,000

Direct labor360,000 

Administrative expenses-variable20,000

Manufacturing overhead-variable380,000 

Administrative expenses-fixed60,000

Manufacturing overhead-fixed280,000

Instructions

Problem 1: Prepare a CVP income statement for 2022 based on management's estimates. (Show column for total amounts only.)

Problem 2: Compute the break-even point in (1) units and (2) dollars.

Problem 3: Compute the contribution margin ratio and the margin of safety ratio. (Round to nearest full percent.)

Problem 4: Determine the sales dollars required to earn net income of $180,000.Compute break-even point under alternative courses of action.