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 earn net income of $210,000. (Round answer to 0 decimal places, e.g. 1,225.) Required sales dollars $
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 earn net income of $210,000. (Round answer to 0 decimal places, e.g. 1,225.) Required sales dollars $
Financial & Managerial Accounting
14th Edition
ISBN:9781337119207
Author:Carl Warren, James M. Reeve, Jonathan Duchac
Publisher:Carl Warren, James M. Reeve, Jonathan Duchac
Chapter19: Cost-Volume-Profit Analysis
Section: Chapter Questions
Problem 19.19EX
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Question
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
|
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 earn net income of $210,000. (Round answer to 0 decimal places, e.g. 1,225.)
Required sales dollars |
$
|
![Calculate variable cost per bottle. (Round variable cost per bottle to 3 decimal places, e.g. 0.251.)
Variable cost per bottle
Compute the break-even point in (1) units and (2) dollars. (Round answers to 0 decimal places, e.g. 1,225.)
(1)
Compute the break-even point
units
(2)
Compute the break-even point
$
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Transcribed Image Text:Calculate variable cost per bottle. (Round variable cost per bottle to 3 decimal places, e.g. 0.251.)
Variable cost per bottle
Compute the break-even point in (1) units and (2) dollars. (Round answers to 0 decimal places, e.g. 1,225.)
(1)
Compute the break-even point
units
(2)
Compute the break-even point
$
%24
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Transcribed Image Text:%24
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