Reference no: EM132909370
Question - Ripple Company bottles and distributes Ripple Fizz, a flavoured wine beverage. The beverage is sold for $1.50 per 8 ounce bottle to retailers. Management estimates the following revenues and costs at 100% of capacity.
Net Sales $3,000,000
Selling expenses - variable $35,000
Direct materials $700,000
Selling expenses - fixed $14,000
Direct labour $1,000,000
Administrative expenses - variable $15,000
Manufacturing Overhead - variable $400,000
Administrative expenses - fixed $30,000
Manufacturing Overhead - fixed $170,000
Required -
a) How much is net income for the year using the CVP approach? Present in CVP income statement format.
b) Calculate the break-even point units and dollars.
c) How much is the contribution margin ratio?