Sheridan Company bottles and distributes B-Lite, a diet soft drink. The beverage is sold for...
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Sheridan Company bottles and distributes B-Lite, a diet soft drink. The beverage is sold for 60 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 | $1,980,000 | Selling expensesvariable | $79,000 | |||
|---|---|---|---|---|---|---|
| Direct materials | 500,000 | Selling expensesfixed | 56,000 | |||
| Direct labor | 380,000 | Administrative expensesvariable | 27,000 | |||
| Manufacturing overheadvariable | 400,000 | Administrative expensesfixed | 179,500 | |||
| Manufacturing overheadfixed | 210,000 |
Compute the contribution margin ratio and the margin of safety ratio. (Round variable cost per bottle to 3 decimal places, e.g. 0.25 and final answers to 0 decimal places, e.g. 25%.) Contribution margin ratio enter percentages rounded to 0 decimal places % Margin of safety ratio enter percentages rounded to 0 decimal places % Save for Later
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