Jorge Company bottles and distributes B-Lite, a diet soft drink.
accounting teacher (Not rated)
(Not rated)
P5-2A Jorge Company bottles and distributes B-Lite, a diet soft drink. The beverage is sold for $0.50 per 16-ounce bottle to retailers, who charge customers $0.75 per bottle. For the year 2014, management estimates the following revenues and costs:
Net sales | $1,800,000 | Selling expenses - Variable | $70,000 |
Direct materials | 430,000 | Selling expenses - Fixed | 65,000 |
Direct labor | 360,000 | Administrative expenses - Variable | 20,000 |
Manufacturing overhead - Variable | 380,000 | Administrative expenses - Fixed | 60,000 |
Manufacturing overhead - Fixed | 280,000 | ||
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
Jorge Company bottles and distributes B-Lite, a diet soft drink.
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p5-2a_jorge_company.xls
