Question

Can anyone who answers this please explain where you get numbers from if u have to add anything together or multiply for example. Also I know some of the numbers I have are very likely incorrect

Blossom 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 2020, management estimates the following revenues and costs. Sales Direct materials Direct labor Manufacturing overhead-variable Manufacturing overhead-fixed $1,500,000 410,000 330,000 350,000 150,000 Selling expenses-variable Selling expenses-fixed Administrative expenses-variable Administrative expenses-fixed $90,000 50,000 20,000 40,000 Prepare a CVP income statement for 2020 based on management's estimates. BLOSSOM COMPANY CVP Income Statement (Estimated) For the Year Ending December 31, 2020 $ Sales 1500000 Variable Expenses Cost of Goods Sold 1090000 Selling Expenses 90000 Administrative Expenses 20000 Total Variable Expenses V 1200000 Contribution Margin 300000 Fixed Expenses Cost of Goods Sold 890000 Selling Expenses 50000 Administrative Expenses 40000 Total Fixed Expenses 980000 Net Income/(Loss) $ -680000

Answer 1

$1,500,000 BLOSSOM COMPANY CVP Income Statement For the Year Ending December 31, 2020 Sales Variable cost Cost of goods sold $1,090,000 Selling expenses $90,000 Administrative expenses $20,000 Total variable cost Contribution margin Fixed cost Cost of goods sold $150,000 Selling expenses $50,000 Administrative expenses $40,000 Total Fixed expense Net profit (Loss) $1,200,000 $300,000 $240,000 $60,000 Variable cost per bottle $0.40 Total variable cost Total units Variable cost per bottle $1,200,000 3,000,000 $1,500,000/$0.50 $0.40 1) Units Break even point in sales units Fixed cost Contribution margin per unit $240,000 $0.10 2,400,000 $1,200,000 2,400,000 * $0.50 2) Break even point in sales $ (Break even units * selling price) Working notes: Contribution margin Total units Contribution margin per unit $300,000 a 3,000,000 b $0.10 a/b 4) Contribution margin ratio 20% Margin of safety ratio 20% Sales Contribution margin Contribution margin ratio (Contribution margin/Selling price) $1,500,000 a $300,000 b 20%b/a Actual sales Break even sales Margin of safety (Actual sales - break even sales) Margin of safety ratio $1,500,000 a $1,200,000 $300,000 b 20% a/b 5) Sales $ to achieve net income $1,950,000 Sales $ Sales $ to achieve target income Fixed cost + Target profit Contribution margin ratio $390,000 $1,950,000 20%