Problem 18-2A_Jorge Company_Breakeven Analysis

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Problem 18-2A

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Jorge 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 80 cents per bottle. For
the year 2014, management estimates the following revenues and costs.

Sales

$
1,807,900

Selling
expenses—variable

$
68,400

Direct materials

427,000

Selling expenses—fixed

67,400

Direct labor

355,600

Administrative
expenses—variable

48,293

Manufacturing
overhead—variable

312,000

Administrative
expenses—fixed

64,900

Manufacturing
overhead—fixed

292,600

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Prepare a CVP income statement for 2014 based on
management’s estimates.

JORGE
COMPANY

CVP Income Statement (Estimated)
For the Year Ending December 31, 2014

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$
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$
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$
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Calculate variable cost per bottle.(Round variable cost per bottle to 2 decimal places, e.g.
0.25.)

Variable cost per
bottle

$
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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

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units

(2)

Compute the
break-even point

$
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Compute the contribution margin ratio and the margin of
safety ratio.(Round answers to 0
decimal places, e.g. 25%.)

Contribution margin
ratio

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%

Margin of safety
ratio

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%

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Determine the sales dollars required to earn net income of $
241,100 .(Round answers to 0
decimal places, e.g. 1,225.)

Required sales
dollars

$
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