Problem 18-2A_Jorge Company_Breakeven Analysis

Problem 18-2A

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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 80 cents per bottle. For the year 2014, management estimates the following revenues and costs.

Sales	$ 1,807,900	Selling expenses—variable	$ 68,400
Direct materials	427,000	Selling expenses—fixed	67,400
Direct labor	355,600	Administrative expenses—variable	48,293
Manufacturing overhead—variable	312,000	Administrative expenses—fixed	64,900
Manufacturing overhead—fixed	292,600

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Calculate variable cost per bottle. (Round variable cost per bottle to 2 decimal places, e.g. 0.25.)

Variable cost per bottle

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

(1)

Compute the break-even point

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units

(2)

Compute the break-even point

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Compute the contribution margin ratio and the margin of safety ratio. (Round answers to 0 decimal places, e.g. 25%.)

Contribution margin ratio

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Margin of safety ratio

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Determine the sales dollars required to earn net income of $ 241,100 . (Round answers to 0 decimal places, e.g. 1,225.)

Required sales dollars

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