Tasty Beverages began business in 2010 selling bottles of a thirst-quenching drink. Production for the first year was 104,000 bottles, and sales were 98,000 bottles. The selling price per bottle was $3.10. Costs incurred during the year were as follows:
Ingredients used …………………………………………..$56,000
Direct labor ……………………………………………. 26,000
Variable overhead ……………………………………… 48,000
Fixed overhead ………………………………………… 5,200
Variable selling expenses ……………………………….. 10,000
Fixed selling and administrative expenses ………………. 28,000
Total actual cost ……………………………………… $173,200
For 2010:
a. What was the production cost per bottle under variable costing?
b. What was variable cost of goods sold?
c. What was the contribution margin per bottle?
d. What was the contribution margin ratio?