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# Prepare a CVP income statement, compute break-even point, contribution margin ratio, margin of safety ratio and sales for target net income

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 P5-2A  Prepare a CVP income statement, compute break-even point, contribution margin ratio, margin of safety ratio and sales for target net income Jorge 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 2017, management estimates the following revenues and costs. Sales \$1,800,000 Selling expenses - variable \$70,000 Direct materials 430,000 Selling expenses - fixed 65,000 Direct labor 360,000 Administrative expenses - variable 20,000 Manufacturing overhead- variable 380,000 Administrative expenses - fixed 60,000 Manufacturing overhead -fixed 280,000 Instructions (a) Prepare a CVP income statement for 2017 based on management estimates.  (show column for total amounts only.) (b) Compute the break-even point in (1) units and (2) dollars. (c ) Compute the contribution margin ratio and the margin of safety ratio. (Round to the nearest full percent.) (d) Determine the sales dollars required to earn net income of \$180,000. NOTE:  Enter a number in cells requesting a value; enter either a number or a formula in cells with a "?" .

You will get a XLSX (57KB) file

\$ 24.99

\$ 24.99

Discount has been applied.

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