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 $19 Direct labor 13 Factory overhead$323,500 10 Selling expenses: Sales salaries and commissions67,200 4 Advertising22,700 Travel5,100 Miscellaneous selling expense5,600 4 Administrative expenses: Office and officers' salaries65,700 Supplies8,100 2 Miscellaneous administrative expense7,540 2 Total$505,440 $54

It is expected that 10,140 units will be sold at a price of $135 a unit. Maximum sales within the relevant range are 13,000 units.

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 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: It is expected that 10,140 units will be sold at a price of $135 a unit. Maximum sales within the relevant range are 13,000 units. Required: 1. Prepare an estimated income statement for 207. It is expected that 10,140 units will be sold at a price of $135 a unit. Maximum sales within the relevant range are 13,000 units. Required: 1. Prepare an estimated income statement for 20Y7. 2. What is the expected contribution margin ratio? Round to the nearest whole percent. % 3. Determine the break-even sales in units and dollars. Unin units Dvilars units 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