Homework Answers
| SHERIDAN COMPANY | ||
| CVP Income Statement (Estimated) | ||
| For the Year Ending December 31, 2020 | ||
| Sales | 1980000 | |
| Variable expenses | ||
| Cost of goods sold (500000 + 380000 + 400000) | 1280000 | |
| Selling expenses | 79000 | |
| Administrative expenses | 27000 | |
| Total variable expenses | 1386000 | |
| Contribution margin | 594000 | |
| Fixed expenses | ||
| Cost of goods sold | 210000 | |
| Selling expenses | 56000 | |
| Administrative expenses | 179500 | |
| Total fixed expenses | 445500 | |
| Net income/(loss) | 148500 | |
Variable cost per bottle = Total variable expenses/Number of bottles = $1386000/3300000 = $0.42
Number of bottles sold = Sales/Sales price per bottle = $1980000/$0.60 = 3300000
(1) Breakeven point = Total fixed expenses/Contribution margin per unit = $445500/($0.60 - $0.42) = $445500/$0.18 = 2475000 units
(2) Breakeven point = 2475000 x $0.60 = $1485000
Contribution margin ratio = Contribution margin/Sales = $594000/$1980000 = 30%
Margin of safety ratio = (Actual sales - Breakeven sales)/Actual sales = ($1980000 - $1485000)/$1980000 = $495000/$1980000 = 25%
Required sales dollars = (Total fixed expenses + Target net income)/Contribution margin ratio = ($445500 + $150000)/30% = $595500/30% = $1985000
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Question 1 of 1 -/1 E Sales Sheridan Company bottles and distributes B-Lite, a diet soft...
A.) B/C.) D/E.) Sheridan Company bottles and distributes B-Lite, a diet soft drink. The beverage is...
A.)
B/C.)
D/E.)
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B/C.)
D/E.)
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retailers, who charge customers 75 cents per bottle. For the year
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costs.
Sales
$1,920,000
Selling expenses—variable
$147,000
Direct materials
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370,000
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