Solution:
| WILDHORSE COMPANY | ||
| CVP Income statement (Estimated) | ||
| For the year Ending December 31,2020 | ||
| Sales | 17,50,000 | |
| Variable expenses | ||
| Cost of goods sold | 12,70,000 | |
| Selling expenses | 1,08,000 | |
| Administrative expenses | 22,000 | |
| Total variable expenses | 14,00,000 | |
| Contribution margin | 3,50,000 | |
| Fixed expenses | ||
| Cost of goods sold | 1,20,000 | |
| Selling expenses | 54,000 | |
| Administrative expenses | 71,000 | |
| Total fixed expenses | 2,45,000 | |
| Net Income | 1,05,000 |
| Varaible cost per bottle | 0.4 |
| Break even point in units | |
| Units selling price | 0.5 |
| Units variable costs | 0.4 |
| Untis contribution margin | 0.1 |
| Fixed costs | 2,45,000 |
| Break even point in units | 2450000 |
| Break even point in dollars | 1225000 |
| Contribution margin ratio | |
| Unit contribution margin | 0.1 |
| Unit selling price | 0.5 |
| Contribution margin ratio | 20 |
| Margin of safety ratio | |
| Total sales | 17,50,000 |
| Break even sales | 1225000 |
| Margin of safety (dollars) | 5,25,000 |
| Total sales | 17,50,000 |
| Margin of safety ratio | 30 |
| Target Income | 2,00,000 |
| Fixed cost | 2,45,000 |
| Contribution margin ratio | 0.2 |
| Required sales dollars | 2225000 |


Wildhorse Company bottles and distributes B-Lite, a diet soft drink. The beverage is sold for 50...
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Sales
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Selling expenses—variable
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Administrative expenses—variable
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Manufacturing overhead—fixed
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$
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A.)
B/C.)
D/E.)
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