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CVP income statement

Tritz Company bottles and distributes Livit, 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 2005, management estimates the following revenues and costs.

Net sales $1,800,000 Selling expenses-variable $70,000
Direct materials 430,000 Selling expenses-fixed 65,000
Direct labor 280,000 Administrative expenses
Manufacturing overhead variable 20,000
Variable 316,000 Administrative expenses-
Manufacturing overhead fixed 51,000
Fixed 283,000

Instructions

(a) Prepare a CVP income statement for 2005 based on management's estimates.
(b) Compute the break-even point in (1) units and (2) dollars
(c) Compute the contribution margin ratio and the margin of safety ration.(Round to full percents)
(d) Determine the sales dollars required to earn net income of $190,000

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Tritz Company bottles and distributes Livit, 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 2005, management estimates the following ...

Solution Summary

This provides the steps to prepare the CVP income statement

$2.19