A company bottles and distributes a fruit drink. THe beverage is sold for 50 cents per 16-ounce bottle to retailers, who charge customers 70 cents per bottle. For the year 2008, management estimates the following revenues and costs.
Net sales- 2,000,000
Direct Materials- 360000
DIrect Labor- 590000
Manu overhead-Variable cost- 270000
manu overhead- fixed cost- 220000
Selling expenses-variable- 100000
selling expenses- fixed-150000
Admin expenses- variable- 40000
Adnim expenses- fixed- 78000
1. Prepare a CVP income statement for 2008 based on managments estimates
2. Compute Break even point ins 1. units and 2. dollars
3. COmpute the contribution margin ratio and the margin of safety ratio
4. Determine the sales dollars required to earn net income od $272,000
