Utech Company bottles and distributes Livit, a diet soft drink

ACC 560 Week 4 Assignment

P5-2A Utech Company bottles and distributes Livit, 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 2008, management estimates the following revenues and costs.
Net sales $1,800,000 Selling expenses-variable $70,000
Direct materials 430,000 Selling expenses-fixed 65,000
Direct labor 352,000 Administrative expenses-variable 20,000
Manufacturing overhead-variable 316,000 Administrative expenses-fixed 60,000
Manufacturing overhead-fixed 283,000

Instructions:
a. Prepare a CVP income statement for 2008 based on management's estimates.
b. Compute the break-even point in (1) units and (2) dollars.
c. Compute the contribution margin ratio and the margin of safety ratio. (Round to full percents.)
d. Determine the sales dollars required to earn net income of $238,000.

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Speedy Printing manufactures soft cover books

Speedy Printing manufactures soft cover books. For January, the following information is available:

Budgeted market size (units) 125,000
Budgeted market share 18%
Budgeted average contribution margin per unit $1.20
Actual market size (units) 100,000
Actual market share 19%
Actual average contribution margin per unit $1.22

Required:
Compute the market-share variance, the market-size variance, and the sales-quantity variance in terms of the contribution margin.

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