Need help answering the blanks. Thank you. Jorge Company bottles and distributes

ID: 2416639 • Letter: N

Question

Need help answering the blanks. Thank you.

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 77 cents per bottle. For the year 2014, management estimates the following revenues and costs. Sales Direct Direct labor Manufacturing overhead-variable Manufacturing overhead-fixed 68,000 68,100 70,640 63,400 $1,813,000 Selling expenses-variable materials 429,200 Selling expenses-fixed 352,000 Administrative expenses-variable 313,000 Administrative expenses-fixed 291,400

Explanation / Answer

Sales !1,813,000

variable expense

Cost of goods sold $1,094,200

Selling expense 68,000

Administrative expense 70,640

total variable expense $1,232,840

Contribution margin 580,160

Fixed expense:

cost of goods sold 291,400

Selling expense 68,100

Administrative expense 63,400

Total Fixed expense $422,900

Net income $157,260

bottle sold = 1813,000/.50 -=3,626,000

contribution per bottle - 1232,840/3,626,000 = .34 per unit

1) BEP = 422,900/.16 = 2,643,125

2)BEP = $1,321,563

Contribution margin ratio= .16/.5 = 32%

margin of safety ratio = (1,813,000- 1,321,563)/1813,000 = 27%

Required sales dollars = $2,073,125