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:

Line Item Description	Estimated Fixed Cost	Estimated Variable Cost (per unit sold)
Production costs:
Direct materials		$19
Direct labor		13
Factory overhead	$490,300	10
Selling expenses:
Sales salaries and commissions	101,900	4
Advertising	34,500
Travel	7,700
Miscellaneous selling expense	8,400	4
Administrative expenses:
Office and officers' salaries	99,600
Supplies	12,300	2
Miscellaneous administrative expense	11,380	2
Total	$766,080	$54

It is expected that 9,880 units will be sold at a price of $180 a unit. Maximum sales within the relevant range are 12,000 units.

Required:

Question Content Area

1. Prepare an estimated income statement for 20Y7.

Belmain Co. Estimated Income Statement For the Year Ended December 31, 20Y7

Line Item Description	Amount	Amount	Amount
Direct materialsMiscellaneous administrative expenseOperating incomeSalesSales salaries and commissions			$- Select -
Cost of goods sold:
Direct materialsOperating incomeSalesSuppliesTravel		$- Select -
AdvertisingDirect laborLoss from operationsOffice and officers' salariesOperating income		- Select -
Factory overheadMiscellaneous administrative expenseSalesSuppliesTravel		- Select -
Total cost of goods sold			Total cost of goods sold
Gross profit			$Gross profit
Expenses:
Selling expenses:
Factory overheadMiscellaneous administrative expenseOperating incomeSalesSales salaries and commissions	$- Select -
AdvertisingCost of goods manufacturedDirect materialsOffice and officers' salariesSales	- Select -
Direct laborFactory overheadSalesSuppliesTravel	- Select -
Direct materialsMiscellaneous administrative expenseMiscellaneous selling expenseSalesSupplies	- Select -
Total selling expenses		$ Total selling expenses
Administrative expenses:
AdvertisingDirect laborOffice and officers' salariesSales salaries and commissionsTravel	$- Select -
Direct materialsFactory overheadSalesSuppliesTravel	- Select -
Direct materialsMiscellaneous administrative expenseMiscellaneous selling expenseSalesSales salaries and commissions	- Select -
Total administrative expenses		Total administrative expenses
Total expenses			Total expenses
Operating income			$Operating income

Question Content Area

2. What is the expected contribution margin ratio? (Round to the nearest whole percent.) fill in the blank 1 of 1 %

3. Determine the break-even sales in units and dollars. Units fill in the blank 1 of 2 units Dollars fill in the blank 2 of 2$

4. Construct a cost-volume-profit chart on your own paper. What is the break-even sales? fill in the blank 1 of 1$

5. What is the expected margin of safety in dollars and as a percentage of sales? Dollars fill in the blank 1 of 2$ Percentage: (Round to the nearest whole percent.) fill in the blank 2 of 2%

6. Determine the operating leverage. (Round to one decimal place.) fill in the blank 1 of 1