Problem 18-2A Jorge Company bottles and distributes B-Lite, a diet soft drink. T

Question

Problem 18-2A 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 75 cents per bottle For the year 2017, management estimates the following revenues and costs. Sales Direct materials Direct labor Manufacturing overhead-variable Manufacturing overhead-fixed $50,000 50,000 36,000 54,000 $1,840,000 Selling expenses-variable 440,000 Selling expenses-fixed 320,000 Administrative expenses-variable 350,000 Administrative expenses-fixed 498,000

Explanation / Answer

Dear Student Thank you for using Chegg Please find below the answer Statementshowing Computations Paticulars Amount Sales      1,840,000.00 Variable costs: Direct Materials         440,000.00 Direct Labour         320,000.00 Variable manufacturing overhead         350,000.00 Variable selling expenses            50,000.00 Variable admin expenses            36,000.00 Total Variable costs      1,196,000.00 Contribution = Sales - VC         644,000.00 Fixed costs Fixed manufacturing overhead         498,000.00 Fixed selling expenses            50,000.00 Fixed admin expenses            54,000.00 Total fixed costs         602,000.00 Income= 644000 - 602000            42,000.00 No of Bottles sold = 1840,000/.50      3,680,000.00 Variable cost per bottle = 1196,000/3680,000                      0.33 CM Ratio = 644000/1840,000 35.00% BEP in $ = 602000/35%      1,720,000.00 BEP in units = 1720,000/.50      3,440,000.00 MOS = (1840,000-1720,000)/1840,000 6.52% Required income            64,750.00 Fixed costs         602,000.00 Desired contribution         666,750.00 Required sales $ = 666,750/35%      1,905,000.00

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