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

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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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 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 estimates. Calculate variable cost per bottle.

Administrative Expenses
Contribution Margin
Cost of Goods Sold
Fixed Expenses
Net Income/(Loss)
Sales
Selling Expenses
Total Fixed Expenses
Total Variable Expenses
Variable Expenses
Gross Profit
Transcribed Image Text:Administrative Expenses Contribution Margin Cost of Goods Sold Fixed Expenses Net Income/(Loss) Sales Selling Expenses Total Fixed Expenses Total Variable Expenses Variable Expenses Gross Profit
Sales
Contribution Margin
Fixed Expenses
Selling Expenses
Administrative Expenses
Total Fixed Expenses
Net Income/(Loss)
>
CARLA VISTA COMPANY
CVP Income Statement (Estimated)
190000
58000 i
52000
tA
2000000
1500000
500000
300000 i
200000
Transcribed Image Text:Sales Contribution Margin Fixed Expenses Selling Expenses Administrative Expenses Total Fixed Expenses Net Income/(Loss) > CARLA VISTA COMPANY CVP Income Statement (Estimated) 190000 58000 i 52000 tA 2000000 1500000 500000 300000 i 200000
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