Belmain Co. expects to maintain the same inventories at the end of 20Y7 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 Fixed Cost			Estimated Variable Cost (per unit sold)
Production costs:
	Direct materials				$13
	Direct labor				9
	Factory overhead	$215,000			6
Selling expenses:
	Sales salaries and commissions	44,700			3
	Advertising	15,100
	Travel	3,400
	Miscellaneous selling expense	3,700			3
Administrative expenses:
	Office and officers' salaries	43,700
	Supplies	5,400			1
	Miscellaneous administrative expense	5,000			1
	Total	$336,000			$36

It is expected that 8,000 units will be sold at a price of $120 a unit. Maximum sales within the relevant range are 10,000 units.

Required:

1. Prepare an estimated income statement for 20Y7.

Belmain Co.
Estimated Income Statement
For the Year Ended December 31, 20Y7
Sales			$fill in the blank e7503e028020fe6_2
Cost of goods sold:
		$fill in the blank e7503e028020fe6_4
		fill in the blank e7503e028020fe6_6
		fill in the blank e7503e028020fe6_8
Total cost of goods sold			fill in the blank e7503e028020fe6_9
Gross profit			$fill in the blank e7503e028020fe6_10
Expenses:
Selling expenses:
	$fill in the blank e7503e028020fe6_12
	fill in the blank e7503e028020fe6_14
	fill in the blank e7503e028020fe6_16
	fill in the blank e7503e028020fe6_18
Total selling expenses		$fill in the blank e7503e028020fe6_19
Administrative expenses:
	$fill in the blank e7503e028020fe6_21
	fill in the blank e7503e028020fe6_23
	fill in the blank e7503e028020fe6_25
Total administrative expenses		fill in the blank e7503e028020fe6_26
Total expenses			fill in the blank e7503e028020fe6_27
Income from operations			$fill in the blank e7503e028020fe6_28

2. What is the expected contribution margin ratio? Round to the nearest whole percent. fill in the blank 615f41031026fbd_1 %

3. Determine the break-even sales in units and dollars.

Units	fill in the blank 615f41031026fbd_2 units
Dollars	fill in the blank 615f41031026fbd_3 units

4. Construct a cost-volume-profit chart on your own paper. What is the break-even sales? $ fill in the blank 615f41031026fbd_4

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

Dollars:	$fill in the blank 615f41031026fbd_5
Percentage: (Round to the nearest whole percent.)	fill in the blank 615f41031026fbd_6	%

6. Determine the operating leverage. Round to one decimal place. fill in the blank 615f41031026fbd_7