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:
Fixed Cost 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 2077 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 Estimated Variable cost (per unit sold) Production costs Direct materials Direct labor Factory overhead $691,900 Selling expenses 143,800 $28 19 14 Sales salaries and commissions 48,600 Advertising Travel 10,800 11,900 Miscellaneous selling expense Administrative expenses Office and officers' salaries Supplies Miscellaneous administrative expense 2 140,500 17,300 16,280 $1,081,080 3 $78 Total It is expected that 7,920 units will be sold at a price of $312 a unit. Maximum sales within the relevant range are 10,000 units Required: ry eBook 1. Prepare an estimated income statement for 2017. Belmain Co. Estimated Income Statement For the Year Ended December 31, 2017 Cost of goods sold: Total cost of goods sold B Gross profit Expenses: Selling expenses Total selling expenses Administrative expenses: 10 QUI si Total administrative expenses Total expenses 2. What is the expected contribution margin ratio? Round to the nearest whole percent. % 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: (Round to the nearest whole percent.) 6. Determine the operating leverage. Round to one decimal place. Fixed Cost 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 2077 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 Estimated Variable cost (per unit sold) Production costs Direct materials Direct labor Factory overhead $691,900 Selling expenses 143,800 $28 19 14 Sales salaries and commissions 48,600 Advertising Travel 10,800 11,900 Miscellaneous selling expense Administrative expenses Office and officers' salaries Supplies Miscellaneous administrative expense 2 140,500 17,300 16,280 $1,081,080 3 $78 Total It is expected that 7,920 units will be sold at a price of $312 a unit. Maximum sales within the relevant range are 10,000 units Required: ry eBook 1. Prepare an estimated income statement for 2017. Belmain Co. Estimated Income Statement For the Year Ended December 31, 2017 Cost of goods sold: Total cost of goods sold B Gross profit Expenses: Selling expenses Total selling expenses Administrative expenses: 10 QUI si Total administrative expenses Total expenses 2. What is the expected contribution margin ratio? Round to the nearest whole percent. % 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: (Round to the nearest whole percent.) 6. Determine the operating leverage. Round to one decimal place
