Question

Jorge Company battles and distributes B-Lite, a diet soft drink. The beverage is sold for 60 cents per 16-ounce bottle to retailers, who charge customers 90 cents per bottle. For the year 2017, management estimates the following revenues and costs. Sales Direct materials Direct labor Manufacturing overhead-variable Manufacturing overhead-fixed $2,052,000 460,000 300,000 430,000 539,300 Selling expenses-variable Selling expenses-fixed Administrative expenses-variable Administrative expenses-fixed $60,000 60,000 83,800 58,000 Your answer is partially correct. Try again. Prepare a CVP income statement for 2017 based on management's estimates. JORGE COMPANY CVP Income Statement (Estimated) For the Year Ending December 31, 2017 Sales Variable Expenses Cost of Goods Sold T Selling Expenses Administrative Expenses 83800 Total Variable Expenses o Contribution Margin Fixed Expenses Selling Expenses Administrative Expenses Total Variable Expenses 100 III PL Total Fixed Expenses TNet Income/(Loss)

Answer 1

Answer :

                                                                              JORGE COMPANY

                                                              CVP INCOME STATEMENT (Estimated)

                                                              For the Year ending December 31, 2017

Particulars                                                                         Amount($)                      Amount($)

Sales                                                                                                                                2052000

Less : Variable cost                                                             

          Direct material                                                           460000

          Direct labor                                                                300000

          Manufacturing overhead - Variable                            430000

          Selling expenses - variable                                          60000

          Administrative expenses - variable                               83800

               Total Variable Cost                                                                                            1333800

Contribution Margin                                                                                                            718200       

Less : Fixed cost

          Manufacturing overheads - Fixed                              539300

          Selling expenses - Fixed                                              60000

          Administrative expenses - Fixed                                  58000

              Total Fixed Cost                                                                                                657300

Net income / (Loss)                                                                                                          60900