0.9 Hawkins Company bottles and distributes Smooth, a fruit drink. The beverage is sold for 50 cents per 16- ounce bottle to retailers, who charge customers 70 cents per bottle. For the year 2014, management estimates the following revenues and costs. Net sales Direct materials Direct labor Manufacturing overhead-variable Manufacturing overhead-fixed Selling expenses-variable Selling expenses-fixed Administrative expenses-variable Administrative expenses-fixed $2,000,000 290,000 70,000 220,000 280,000 80,000 150,000 40,000 70,000 Questions: Prepare a CVP income statement for 2014 based on management's estimates. Compute the break-even point in (1) units and (2) dollars. Compute the contribution margin ratio and the margin of safety ratio. Determine the sales dollars required to earn net income of $450,000.
0.9 Hawkins Company bottles and distributes Smooth, a fruit drink. The beverage is sold for 50 cents per 16- ounce bottle to retailers, who charge customers 70 cents per bottle. For the year 2014, management estimates the following revenues and costs. Net sales Direct materials Direct labor Manufacturing overhead-variable Manufacturing overhead-fixed Selling expenses-variable Selling expenses-fixed Administrative expenses-variable Administrative expenses-fixed $2,000,000 290,000 70,000 220,000 280,000 80,000 150,000 40,000 70,000 Questions: Prepare a CVP income statement for 2014 based on management's estimates. Compute the break-even point in (1) units and (2) dollars. Compute the contribution margin ratio and the margin of safety ratio. Determine the sales dollars required to earn net income of $450,000.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Q.9
Hawkins Company bottles and distributes Smooth, a fruit drink. The beverage is sold for 50 cents per 16-
ounce bottle to retailers, who charge customers 70 cents per bottle. For the year 2014, management
estimates the following revenues and costs.
Net sales
Direct materials
ct labor
Manufacturing overhead-variable
Manufacturing overhead-fixed
Selling expenses-variable
Selling expenses-fixed
Administrative expenses-variable
Administrative expenses-fixed
$2,000,000
290,000
70,000
220,000
280,000
80,000
150,000
40,000
70,000
Questions:
Prepare a CVP income statement for 2014 based on management's estimates.
Compute the break-even point in (1) units and (2) dollars.
Compute the contribution margin ratio and the margin of safety ratio.
Determine the sales dollars required to earn net income of $450,000.
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