$19 Contribution Margin, Break-Even Sales, Cost-Volume-Profit Chart, Margin of Safety, and Operating Leverage Belmain Co. expects to maintain the same inventories at the end of 2017 as at the beginning of the year. The total of all production costs for the year is therefore assumed to be equal to the cost of goods sold with this in mind, the various department heads were asked to submit estimates of the costs for their departments during the year. A summary report of these estimates is as follows: Estimated Estimated Variable Cost Fixed Cost (per unit sold) Production costs: Direct materials Direct labor 13 Factory overhead $112.000 10 Selling expenses: Sales salaries and commissions 23,300 Advertising 7,900 1,700 Miscellaneous Selling expense Administrative expenses Office and officers' salaries 22,700 Supplies 2.500 2 Miscellaneous administrative expense 2,660 Total $174,960 554 It is expected that 5,760 units will be sold at a price of $135 a unit. Maximum sales within the relevant range are 7,000 units Requiredi 4 Travel 4,900 2 1. Prepare an estimated income statement for 2017 Next > Erlin Submenu Grading All work saved 1. Prepare an estimated income statement for 2017. Belmain Co. Estimated Income Statement For the Year Ended December 31, 2017 Cost of goods sold: Total cost of goods sold Gross profit Expenses: Selling expenses: 00 Total selling expenses Administrative expenses: I DI Direct materials Total administrative expenses Total expenses Administrative expenses: Direct materials Total administrative expenses Total expenses Operating income 2. What is the expected contribution margin ratio? Round to the nearest whole percent 60% 3. Determine the break-even sales in units and dollars. Units 2,160 units Dollars 291,600 4. Construct a cost-volume-profit chart on your own paper. What is the break-even sales? $ 5. What is the expected margin of safety in dollars and as a percentage of sales? Dollars: Percentage: (Round to the nearest whole percent.) 6. Determine the operating leverage. Round to one decimal place. % All work saved