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 $2,000,000 Selling expenses—variable $109,000 Direct materials 550,000 Selling expenses—fixed 58,000 Direct labor 400,000 Administrative expenses—variable 21,000 Manufacturing overhead—variable 420,000 Administrative expenses—fixed 52,000 Manufacturing overhead—fixed 190,000 Prepare a CVP income statement for 2020 based on management’s
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 $2,000,000 Selling expenses—variable $109,000 Direct materials 550,000 Selling expenses—fixed 58,000 Direct labor 400,000 Administrative expenses—variable 21,000 Manufacturing overhead—variable 420,000 Administrative expenses—fixed 52,000 Manufacturing overhead—fixed 190,000 Prepare a CVP income statement for 2020 based on management’s
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Carla Vista 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 | $2,000,000 | Selling expenses—variable | $109,000 | |||
---|---|---|---|---|---|---|
Direct materials | 550,000 | Selling expenses—fixed | 58,000 | |||
Direct labor | 400,000 | Administrative expenses—variable | 21,000 | |||
Manufacturing |
420,000 | Administrative expenses—fixed | 52,000 | |||
Manufacturing overhead—fixed | 190,000 |
Prepare a CVP income statement for 2020 based on management’s estimates. Calculate variable cost per bottle.
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