Question

Current Attempt in Progress Crane Company bottles and distributes B-Lite, a diet soft drink. The beverage is sold for 50 cent
Prepare a CVP income statement for 2020 based on managements estimates. CRANE COMPANY CVP Income Statement (Estimated) For t
Calculate variable cost per bottle. (Round variable cost per bottle to 3 decimal places, e.g. 0.251.) Variable cost per bottl
Determine the sales dollars required to earn net income of $180,000. (Round answer to 0 decimal places, e.g. 1,225.) Required
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Answer #1
Crane Company
CVP Income Statement
Sales 2000000
Variable Exp.:
Cost of goods sold 1320000
Selling Exp. 55000
Admin Exp. 25000
Total Variable Exp. 1400000
Fixed Exp.:
Cost of goods sold 300000
Selling Exp. 52000
Admin Exp. 128000
Total Fixed Exp. 480000
Net Income 120000
Variable Cost Per Bottle
Sales 2000000
Variable Costs 1400000
Variable Costs in % of Sales 70%
Sale price of 1 bottle in cents 0.5
Variable Cost of 1 bottle in cents 0.35
Break Even sales in Units
(Fixed Cost / Contribution Per unit) 3200000
Fixed Cost 480000
Contribution per Unit 0.15
Break Even sales in Dollars
Break Even sales in Units 3200000
Sale price of 1 bottle in cents 0.5
Break Even sales in Dollars 1600000
Contribution Margin Ratio
(Contribution Per unit ) / Sale price per unit
Contribution Margin Ratio 30%
Sale price of 1 bottle in cents 0.5
Variable Cost of 1 bottle in cents 0.35
Contribution of 1 bottle in cents 0.15
Margin Safety Ratio
(Actual Sales - BEP Sale) / Acutal sales
Actual Sales 2000000
BEP Sales 1600000
Margin Safety Ratio 20%
Required sales to get Target Profit of 180000
(Fixed cost + required income)/Contribution Margin Ratio
Fixed Cost 480000
Required Income 180000
Contribution Margin Ratio 30%
Required sales to get Target Profit of 180000 2200000
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