Contribution margin, break even point, margin safety ratio, fixed costs
Not what you're looking for?
Tyson Company bottles and distributes LO-KAL, a fruit drink. The beverage is sold for 50 cents per 16-ounce bottle to retailers, who charge customers 70 cents per bottle.
Management estimates the following revenues and costs.
Net sales $2,500,000 Selling expenses-variable $ 90,000
Direct materials 360,000 Selling expenses-fixed 200,000
Direct labor 650,000 Administrative expenses-
Manufacturing overhead- variable 30,000
variable 370,000 Administrative expenses-
Manufacturing overhead- fixed 140,000
fixed 260,000
Instructions
(a) Compute (1) the contribution margin and (2) the fixed costs.
(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 $240,000.
Purchase this Solution
Solution Summary
This solution is comprised of a detailed explanation to compute (1) the contribution margin and (2) the fixed costs.
Solution Preview
Tyson Company bottles and distributes LO-KAL, a fruit drink. The beverage is sold for 50 cents per 16-ounce bottle to retailers, who charge customers 70 cents per bottle.
Management estimates the following revenues and costs.
Net sales $2,500,000 Selling expenses-variable $ 90,000
Direct materials 360,000 Selling expenses-fixed 200,000
Direct labor 650,000 Administrative expenses- variable ...
Purchase this Solution
Free BrainMass Quizzes
Motivation
This tests some key elements of major motivation theories.
Employee Orientation
Test your knowledge of employee orientation with this fun and informative quiz. This quiz is meant for beginner and advanced students as well as professionals already working in the HR field.
Team Development Strategies
This quiz will assess your knowledge of team-building processes, learning styles, and leadership methods. Team development is essential to creating and maintaining high performing teams.
Situational Leadership
This quiz will help you better understand Situational Leadership and its theories.
Marketing Management Philosophies Quiz
A test on how well a student understands the basic assumptions of marketers on buyers that will form a basis of their marketing strategies.