All Frute Company bottles and distributes Frute Ade, 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.

Instructions
(a) Prepare a CVP income statement for 2014 based on management's estimates. (Show column for total amounts only.)
(b) Compute the break-even point in
(1) Units and
(2) Dollars.
(c) Compute the contribution margin ratio and the margin of safety ratio.
(d) Determine the sales dollars required to earn net income of$624,000.

Transcribed Image Text:

$2,500,000 Seng expenses-variable 80,000 Sales Direct materials Direct labor Manufacturing overhead 360,000 expenses fixed 450,000 Administrative expenses 270,000 380,000 250,000 40,000 150,000 variable variable Administrative expenses- Manufacturing overhead- fixed fixed