Balmain Co expects to maintain the same inventories at the end of 20Y7 As at the beginning of the year. The total of all production cost for the year is therefore assumed to be equal to the cost of good sold. With this in mind, the various department heads were asked to submit an estimate of the cost for their departments during the year.

A summary report of these estimates is as follows:

1. prepare an estimated income statement for 20Y7

2. what is the expected contribution margin ratio percentage?

3. determine the break even sales in units in dollars

4. construct a cost volume profit chart on your own paper what is the break even sales? $1,800,000

$1,920,000

$2,100,000

$2,250,000

5. what is the expected margin of safety in dollars and as a percentage of sales?

6. determine the operating leverage.

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 the various department heads were asked to submit estimates of the costs for their departments during the Estimated Fixed Cost Estimated Variable Cost (per unit sold) Production costs: Direct materials Direct labor $50.00 30.00 6.00 Factory overhead $350,000 Selling expenses: Sales salaries and commissions 4.00 Advertising 340,000 116,000 4,000 2,300 Travel 1.00 Miscellaneous selling expense Administrative expenses: Office and officers' salaries Supplies 325,000 6,000 8,700 4.00 Miscellaneous administrative expense 1.00 Total $1,152,000 $96.00 Check My Work Assignment Score: 90% Type here to search Chapter 21 eBook Calculator Print item It is expected that 12,000 units will be sold at a price of $240 a unit. Maximum sales within the relevant range are 18,000 units. Required: 1. Prepare an estimated income statement for 2017 Belmain Co. Estimated Income Statement For the Year Ended December 31, 2017 Cost of goods sold: Cost of goods sold Gross profit Expenses Selling expenses Total selling expenses Administrative expenses Check My Work assignment Score: 10% All work saved Type here to search Expenses Selling expenses: Total selling expenses Administrative expenses: Total administrative expenses Total expenses Income from operations 2. What is the expected contribution margin ratio? 3. Determine the break-even sales in units and dollars Units units Dollars Check My Work onment Score: 90% gnment Score: 90% All work s: Type here to search Total administrative expenses Total expenses Income from operations 2. What is the expected contribution margin ratio? 96 3. Determine the break-even sales in units and dollars. Units units Dollars 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 (If required, round the percent to one decimal place, e.g. 15.4%) 6. Determine the operating leverage. Check My Work Assignment Score: 90% Type here to search