P5-2A) | |||
a) CVP income statement, 2017: | |||
Sales | 1800000 | ||
Variable expenses: | |||
COGS | 1170000 | (430000+360000+380000) | |
Selling expenses | 70000 | ||
Administrative exp. | 20000 | ||
Total variable expenses | 1260000 | ||
Contribution margin | 540000 | ||
Fixed expenses" | |||
Cost of goods sold | 280000 | ||
sellng expenses | 65000 | ||
Administrative exp. | 60000 | ||
Total Fixed expenses | 405000 | ||
Net Income | 135000 | ||
b) Break even point: | |||
Break even point in units : | |||
Unit Selling Price | 0.75 | ||
Unit variable costs | 0.525 | 1260000*0.75/1800000 | |
Unit contribution margin | 0.225 | ||
Fixed Costs | 405000 | ||
Unit contribution margin | 0.225 | ||
break even point in unit | 1800000 | ||
Break even point in dollars | |||
Break even point in units | 1800000 | ||
Unit selling price | 0.75 | ||
Break even point in dollars | 1350000 | ||
c) | |||
Contribution margin ratio: | |||
Unit contribution margin | 0.225 | ||
Unit selling price | 0.75 | ||
Contribution margin ratio: | 0.3 | ||
Margin of safety ratio | |||
Total sales | 1800000 | ||
Break even sales | 1350000 | ||
Margin of safety (dollars) | 450000 | ||
Total sales | 1800000 | ||
Margin of safety ratio | 0.25 | ||
d) Sales dollars to earn net income of $180000 | |||
Sales dollars required to earn target income: | |||
Fixed costs | 405000 | ||
Target income | 180000 | ||
Total contribution required | 585000 | ||
Contribution margin ratio | 0.3 | ||
Sales dollars required | 1950000 |
nd it rises by $1.10 per anie tB-Lite, a diet soft drink. The beverage is sold...
Sunland Company bottles and distributes B-Lite, a diet soft drink. The beverage is sold for 60 cents per 16-ounce bottle to retailers, who charge customers 75 cents per bottle. For the year 2020, management estimates the following revenues and costs. Sales $1,920,000 Selling expenses—variable $147,000 Direct materials 410,000 Selling expenses—fixed 52,000 Direct labor 370,000 Administrative expenses—variable 27,000 Manufacturing overhead—variable 390,000 Administrative expenses—fixed 42,400 Manufacturing overhead—fixed 280,000 Prepare a CVP Income statement for 2020 based on management's estimates. SUNLAND COMPANY CVP...
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4,5), AN Jorge Company bottles and distributes B-Lite, a diet soft drink. The beverage is sold for 50 cents per 16-ounce bottle to retailers. For the year 2020, management estimates the following revenues and costs. $1,800,000 Selling expenses-variable $70,000 Sales Direct materials Direct labor Manufacturing overhead- 65,000 20,000 60,000 30,000 Selling expenses-fixed 360,000 Administrative expenses- variable variable 380,000 Administrative expenses- Manufacturing overhead fixed fixed 280,000 Instructions a. Prepare a CVP income statement for 2020 based on management's estimates. (Show column...
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