Managerial Accounting: P18-2A Jorge Company bottles and distributes B-Lite

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Managerial Accounting
Problem 18-2A
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 2014, management estimates the following revenues and costs.
Sales 1,800,000
Direct materials 430,000
Direct labor 360,000
Manufacturing overhead—variable 380,000
Manufacturing overhead—fixed 280,000
Selling expenses—variable 70,000
Selling expenses—fixed 65,000
Administrative expenses—variable 20,000
Administrative expenses—fixed 60,000

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.(Round answers to 0 decimal places, e.g. 1,225.)
c. Compute the contribution margin ratio and the margin of safety ratio.(Round answers to 0 decimal places, e.g. 25%.)
d. Determine the sales dollars required to earn net income of $ 180,000 .(Round answers to 0 decimal places, e.g. 1,225.)
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