Blossom 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 2022, management estimates the following revenues and costs.Sales$1,950,000Selling expenses-variable$67,000Direct materials550,000Selling expenses-fixed61,000Direct labor350,000Administrative expenses-variable28,000Manufacturing overhead-variable370,000Administrative expenses-fixed59,250Manufacturing overhead-fixed260,000

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FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Ivanhoe 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 2020, management estimates the following revenues and costs. Sales $1,950,000 Selling expenses—variable $171,000 Direct materials 470,000 Selling expenses—fixed 59,000 Direct labor 340,000 Administrative expenses—variable 24,000 Manufacturing overhead—variable 360,000 Administrative expenses—fixed 120,500 Manufacturing overhead—fixed 230,000 Prepare a CVP income statement for 2020 based on management’s estimates. Compute the contribution margin ratio and the margin of safety ratio. (Round variable cost per bottle to 3 decimal places, e.g. 0.25 and final answers to 0 decimal places, e.g. 25%.) Contribution margin ratio % Margin of safety ratio % Determine the sales dollars required to…
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Ef 240.
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