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Cullumber Company bottles and distributes B-Lite, a diet soft drink. The beverage is sold for 60...

Cullumber Company bottles and distributes B-Lite, a diet soft drink. The beverage is sold for 60 cents per 16-ounce bottle to retailers, who charge customers 75 cents per bottle. For the year 2020, management estimates the following revenues and costs.

Sales $1,800,000 Selling expenses—variable $105,000
Direct materials 510,000 Selling expenses—fixed 62,000
Direct labor 390,000 Administrative expenses—variable 25,000
Manufacturing overhead—variable 410,000 Administrative expenses—fixed 96,000
Manufacturing overhead—fixed 130,000

Prepare a CVP income statement for 2020 based on management’s estimates.

Calculate variable cost per bottle. (Round variable cost per bottle to 3 decimal places, e.g. 0.251.)

Compute the break-even point in (1) units and (2) dollars. (Round answers to 0 decimal places, e.g. 1,225.)

Compute the contribution margin ratio and the margin of safety ratio. (Round variable cost per bottle to 3 decimal places, e.g. 0.25 and final answers to 0 decimal places, e.g. 25%.)

Determine the sales dollars required to earn net income of $170,000. (Round answer to 0 decimal places, e.g. 1,225.)

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ekkarill92 answered 1 year ago
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