Question

Flint 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 2017, management estimates the following revenues and costs. Sales $1,870,000 Selling expenses—variable $50,000 Direct materials 400,000 Selling expenses—fixed 55,000 Direct labor 360,000 Administrative expenses—variable 49,000 Manufacturing overhead—variable 450,000 Administrative expenses—fixed 52,000 Manufacturing overhead—fixed 304,000 Partially correct answer. Your answer is partially correct. Try again. Prepare a CVP income statement for 2017 based on management’s estimates. FLINT COMPANY CVP Income Statement (Estimated) Entry field with correct answer Entry field with correct answer $Entry field with correct answer Entry field with correct answer Entry field with correct answer $Entry field with correct answer Entry field with correct answer Entry field with correct answer Entry field with correct answer Entry field with correct answer Entry field with correct answer Entry field with correct answer Entry field with correct answer Entry field with correct answer Entry field with correct answer Entry field with correct answer Entry field with correct answer Entry field with correct answer Entry field with correct answer Entry field with correct answer Entry field with correct answer Entry field with correct answer Entry field with correct answer Entry field with correct answer $Entry field with incorrect answer now contains modified data LINK TO TEXT LINK TO TEXT LINK TO TEXT Incorrect answer. Your answer is incorrect. Try again. Compute the break-even point in (1) units and (2) dollars. (1) Compute the break-even point Entry field with incorrect answer units (2) Compute the break-even point $Entry field with incorrect answer LINK TO TEXT LINK TO TEXT LINK TO TEXT Incorrect answer. Your answer is incorrect. Try again. Compute the contribution margin ratio and the margin of safety ratio. (Round variable cost per bottle to 3 decimal places, e.g. 0.255 and final answers to 0 decimal places, e.g. 25%.) Contribution margin ratio Entry field with incorrect answer % Margin of safety ratio Entry field with incorrect answer % LINK TO TEXT LINK TO TEXT LINK TO TEXT Incorrect answer. Your answer is incorrect. Try again. Determine the sales dollars required to earn net income of $165,000. Required sales dollars $Entry field with incorrect answer

Answer 1

A)
	Sales					1,870,000
	Variable expenses
	cost of goods sold				1210000
	Selling expenses				50,000
	Administrative expense				49,000
	total variable expense					1,309,000
	Contribution margin					561,000
	fixed expenses
	cost of goods sold				304,000
	Selling expenses				55,000
	Administrative expense				52,000
	total fixed expense					411,000
	Net income					150,000
b-1)	Variable cost per bottle
	Number of bottles = 1,870,000/.50
			3740000
	1,309,000/3740000
	0.35	answer
b2)	Contribution margin per unit = 561000/3740000
				0.15
	Break even units = fixed cost/contribution margin per unit
			411000/.15
			2740000	units	answer
	Break even point dollars = 2740000*.5
			1370000	answer
c)	Contribution margin ration =			.15/.5
				0.3
				30%	answer
	margin of safety = actual sales - BEP sales
			1,870,000-1,370,000
			500,000
	margin of safety ratio = 500,000/1,870,000
			27%	answr
d)	Sales dollar required = ( fixed cost+target profit)/contribution margin ratio
			(411000+165000)/30%
			1920000	answer