PA Prepare a CVP income statement, compute breakeven point, contribution margin ratio, margin of safety ratio
and sales for target net income
Jorge Company bottles and distributes BLite, a diet soft drink. The beverage is sold for cents per ounce bottle Pricedrink $
to retailers. For the year management estimates the following revenues and costs. Unit sales
Target Net $
Sales $ Selling expenses variable $
Direct materials $ Selling expenses fixed $
Direct labor $ Administrative expenses variable $
Manufacturing overhead variable $ Administrative expenses fixed $
Manufacturing overhead fixed $
Instructions
a Prepare a CVP income statement for based on management estimates. show column for total amounts only.
b Compute the breakeven point in units and 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 $
