Ripple company bottles and distributes ripple fizz, a flavored wine

<pclass=”msonospacing” style=”color: rgb(0, 0, 0); font-family: Verdana, arial, sans-serif; font-size: 12px; font-style: normal; font-variant: normal; font-weight: normal; letter-spacing: normal; line-height: normal; orphans: auto; text-align: start; text-indent: 0px; text-transform: none; white-space: normal; widows: 1; word-spacing: 0px; -webkit-text-stroke-width: 0px;”>E15-6 Ripple Company bottles and distributes Ripple Fizz, a flavored wine beverage. The beverage is sold for $1 per 8-ounce bottle to retailers. Management estimates the following revenues and costs at 100% of capacity.

 

 

Net sales $2,100,000 selling expenses-variable $90,000

Direct materials 500,000 Selling expenses-fixed 70,000

Direct Labor 300,000 Administrative expenses-variable 20,000

Manufacturing overhead-variable300,000 Administrative expenses-fixed 50,000

Manufacturing overhead-fixed 275,000

 

 

Instructions

 

How much is net income for the year using the CVP approach?

<pclass=”msonospacing” style=”color: rgb(0, 0, 0); font-family: Verdana, arial, sans-serif; font-size: 12px; font-style: normal; font-variant: normal; font-weight: normal; letter-spacing: normal; line-height: normal; orphans: auto; text-align: start; text-indent: 0px; text-transform: none; white-space: normal; widows: 1; word-spacing: 0px; -webkit-text-stroke-width: 0px;”><pclass=”msonospacing”>Compute the break-even point units and dollars.

 

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C. How much is the contribution margin ratio