All Frute Company bottles and distributes Frute Ade, a fruit drink
accounting teacher (Not rated)
(Not rated)
P5-2B All Frute Company bottles and distributes Frute Ade, a fruit drink. The beverage is sold for $0.50 per 16-ounce bottle to retailers, who charge customers $0.70 per bottle. For the year 2014, management estimates the following revenues and costs:
Net sales | $2,500,000 | Selling expenses - Variable | $80,000 |
Direct materials | 360,000 | Selling expenses - Fixed | 250,000 |
Direct labor | 450,000 | Administrative expenses - Variable | 40,000 |
Manufacturing overhead - Variable | 270,000 | Administrative expenses - Fixed | 150,000 |
Manufacturing overhead - Fixed | 380,000 | ||
Instructions:
(a) Prepare a CVP income statement for 2014 based on management's estimates.
(b) Compute the break-even point in (1) units and (2) dollars.
(c) Compute the contribution margin ratio and the margin of safety ratio.
10 years ago
All Frute Company bottles and distributes Frute Ade, a fruit drink
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p5-2b_all_frute.xls
