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:

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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. 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 $107,800 10 Selling expenses: Sales salaries and commissions 22,400 4 Advertising 7,600 Travel 1,700 Miscellaneous selling expense 1,900 4 Administrative expenses: Office and officers' salaries 21,900 Supplies 2,700 2 Miscellaneous administrative expense 2,480 2 Total $168,480 $54 It is expected that 7,020 units will be sold at a price of $108 a unit. Maximum sales within the relevant range are 9,000 units. 1. Prepare an estimated income statement for 2017. Belmain Co. Estimated Income Statement For the Year Ended December 31, 2017 Sales Cost of goods sold: Direct materials 758,160 133,380 Direct labor 91,260 Factory overhead 178,000 Total cost of goods sold 402,640 355,520 Gross profit Expenses: Selling expenses: Sales salaries and commissions 56,160X 7,600 Advertising Travel 1,700 Miscellaneous selling expense 1,900 x O Total selling expenses Administrative expenses: Office and officers' salaries Supplies 28,080 X Expenses: Selling expenses: Sales salaries and commissions 56,160 X Advertising 7,600 Travel 1,700 1,900 Miscellaneous selling expense X Total selling expenses Administrative expenses: Office and officers' salaries 28,080 X Supplies Miscellaneous administrative expense Total administrative expenses Total expenses Income from operations Feedback Check My Work 1. Use the absorption costing format Learning Objective 2. Learning Objective 3. Learning Objective 4, and Learning Objective 5. Learning Objective 2. Learning Objective 3. Learning Objective 4, and Learning Objective 5. 2. What is the expected contribution margin ratio? Round to the nearest whole percent. % Units 3. Determine the break-even sales in units and dollars. units Dollars 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. %