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All Frute Company bottles and distributes Frute Ade, a fruit drink. The beverage is sold for 50 cents per 16-ounce bottle to retailers, who charge customers 70 cents per bottle. For the year 2017, management estimates the following revenues and costs. Sales Direct materials Direct labor Mfg Overhead - variable Mfg Overhead - fixed Selling expenses- $2,500,000 variable $ 80,000 360,000 Selling expenses-fixed 250,000 450,000 Admin Expense - variable 40,000 150,000 270,000 Admin Expenses - fixed 380,000 Instructions (a) Prepare a CVP income statement for 2017 based on management's estimates. (Show column for total amounts only.) (b) Compute the break-even point in (1) units and (2) dollars. (c) Compute the contribution margin ratio and the margin of safety ratio. (d) Determine the sales dollars required to earn net income of $624,000. (a) ALL FRUTE COMPANY CVP Income Statement (Estimated) For the Year Ending December 31, 2016 2,500,000 Sales Variable Expenses: Total Variable Expenses Contribution Margin Fixed Expenses: Total Fixed Expenses Net Income (1) Direct materials $360,000 + direct labor $450,000 + variable manufacturing overhead $270,000. (b) Variable costs = Total fixed costs = 1) Breakeven in units = 2) Breakeven in dollars (c) Contribution margin ratio Margin of safety ratio = (d) Required sales

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