LINK TO TEXT LINK TO TEXT LINK TO TEXT LINK TO TEXT LINK TO TEXT LINK TO TEXT LI
ID: 2566027 • Letter: L
Question
LINK TO TEXT
LINK TO TEXT
LINK TO TEXT
LINK TO TEXT
LINK TO TEXT
LINK TO TEXT
LINK TO TEXT
LINK TO TEXT
LINK TO TEXT
LINK TO TEXT
LINK TO TEXT
LINK TO TEXT
Jorge 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 2017, management estimates the following revenues and costs.Sales $1,600,000 Selling expenses—variable $50,000 Direct materials 450,000 Selling expenses—fixed 45,000 Direct labor 300,000 Administrative expenses—variable 40,000 Manufacturing overhead—variable 360,000 Administrative expenses—fixed 40,000 Manufacturing overhead—fixed 227,500
Explanation / Answer
CVP Income Statement Sales 1,600,000 less:Variable expense cost of goods sold 1,110,000 Selling expense-variable 50,000 Administrative expense-variable 40,000 total variable expense 1,200,000 Contribution margin 400,000 fixed expense cost of goods sold 227,500 selling expenses -fixed 45,000 Administrative exepsne- fixed 40,000 total fixed expense 312,500 Net income 87,500 units sold 1,600,000/.5= 3200000 Variable cost per bottle(1,200,000/3,200,000)= 0.375 1) BEP(units) = fixed cost/contribution per unit 312,500/.125 2500000 units 2) BEP 1250000 contribution margin ratio 25% margin of safety ratio 22% (1,600,000-1,250,000)/1,600,000= Required sales dollars (312,500+162,500)/50%= 950000
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.