Please answer b2

Pharoah 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		$1,850,000		Selling expensesvariable		$102,000
Direct materials		490,000		Selling expensesfixed		57,000
Direct labor		330,000		Administrative expensesvariable		23,000
Manufacturing overheadvariable		350,000		Administrative expensesfixed		111,500
Manufacturing overheadfixed		220,000

(a)

Correct answer iconYour answer is correct.

Prepare a CVP income statement for 2020 based on managements estimates.

PHAROAH COMPANY CVP Income Statement (Estimated) For the Year Ending December 31, 2020
Administrative ExpensesContribution MarginCost of Goods SoldFixed ExpensesNet Income/(Loss)SalesSelling ExpensesTotal Fixed ExpensesTotal Variable ExpensesVariable ExpensesGross Profit				$
Administrative ExpensesContribution MarginCost of Goods SoldFixed ExpensesNet Income/(Loss)SalesSelling ExpensesTotal Fixed ExpensesTotal Variable ExpensesVariable ExpensesGross Profit
Administrative ExpensesContribution MarginCost of Goods SoldFixed ExpensesNet Income/(Loss)SalesSelling ExpensesTotal Fixed ExpensesTotal Variable ExpensesVariable ExpensesGross Profit		$
Administrative ExpensesContribution MarginCost of Goods SoldFixed ExpensesNet Income/(Loss)SalesSelling ExpensesTotal Fixed ExpensesTotal Variable ExpensesVariable ExpensesGross Profit
Administrative ExpensesContribution MarginCost of Goods SoldFixed ExpensesNet Income/(Loss)SalesSelling ExpensesTotal Fixed ExpensesTotal Variable ExpensesVariable ExpensesGross Profit
Administrative ExpensesContribution MarginCost of Goods SoldFixed ExpensesNet Income/(Loss)SalesSelling ExpensesTotal Fixed ExpensesTotal Variable ExpensesVariable ExpensesGross Profit
Administrative ExpensesContribution MarginCost of Goods SoldFixed ExpensesNet Income/(Loss)SalesSelling ExpensesTotal Fixed ExpensesTotal Variable ExpensesVariable ExpensesGross Profit
Administrative ExpensesContribution MarginCost of Goods SoldFixed ExpensesNet Income/(Loss)SalesSelling ExpensesTotal Fixed ExpensesTotal Variable ExpensesVariable ExpensesGross Profit
Administrative ExpensesContribution MarginCost of Goods SoldFixed ExpensesNet Income/(Loss)SalesSelling ExpensesTotal Fixed ExpensesTotal Variable ExpensesVariable ExpensesGross Profit
Administrative ExpensesContribution MarginCost of Goods SoldFixed ExpensesNet Income/(Loss)SalesSelling ExpensesTotal Fixed ExpensesTotal Variable ExpensesVariable ExpensesGross Profit
Administrative ExpensesContribution MarginCost of Goods SoldFixed ExpensesNet Income/(Loss)SalesSelling ExpensesTotal Fixed ExpensesTotal Variable ExpensesVariable ExpensesGross Profit
Administrative ExpensesContribution MarginCost of Goods SoldFixed ExpensesNet Income/(Loss)SalesSelling ExpensesTotal Fixed ExpensesTotal Variable ExpensesVariable ExpensesGross Profit
Administrative ExpensesContribution MarginCost of Goods SoldFixed ExpensesNet Income/(Loss)SalesSelling ExpensesTotal Fixed ExpensesTotal Variable ExpensesVariable ExpensesGross Profit				$

eTextbook and Media

Attempts: 2 of 5 used

(b1)

Correct answer iconYour answer is correct.

Calculate variable cost per bottle. (Round variable cost per bottle to 3 decimal places, e.g. 0.251.)

Variable cost per bottle

$

.35

eTextbook and Media

Attempts: 3 of 5 used

(b2)

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		$

Pharoah Company CVP Income Statement For the year ending December 31,2020 $ 1,850,000 $ $ $ 1,170,000 102,000 23,000 Sales Revenue Variable Expenses Cost of Goods Sold Selling Expense Administrative Salaries Total Variable Expense Contribution Margin Fixed Expenses Cost of Goods Sold Selling Expense Administrative Salaries Total Fixed Expense Net Income $ $ 1,295,000 555,000 $ $ $ 220,000 57,000 111,500 $ $ 388,500 166,500 Variable cost of Goods sold = Direct material + Direct Labor + Variable Mfg OH = 490000+330000+350000 = 1170000 Fixed Cost of goods sold = Fixed Mfg OH In Cvp income statement cost are bifurcated as Variable and fixed costs