Contribution Margin, Break Event Sales Cost VolumeProhit Chat, Margin of Salety, and Operating Leverage Wolsey Industries Inc expects to maintain the same inventories at the end of 203 as at the beginning of the year, the total of production costs for the year is therefore assumed to be equal to the cost of goods old. With this in mind, the various department heads were asked to submit estinates of the costs for the departments during that summary report of these estimates is as follow Estimated Fixed Cost Estimated Variable Cost (per unit sold) Production costs Direct materials 346 40 $200,000 20 110,000 8 Direct labor Factory overhead Selling expenses Sales salones and commissions Advertising Travel Miscellaneous selling expense Administrative expenses Office and officers' salaries Supplies Miscellaneous administrativer expense 40,000 12,000 7,600 132,000 10,000 13400 $525,000 $120 Total It is expected that 21,875 units wil be sold at a price of $160 a unit. Maximum sales within the relevant range are 27,000 bits Required: 1. Prepare an estimated income statement for 20Y3. Wolsey Industries Inc. Estimated Income Statement For the Year Ended December 31, 20Y3 Cost of goods sold: Total cost of goods sold Gross profit Expenses: Selling expenses: Total selling expenses Administrative expenses: Administrative expenses: Total administrative expenses Total expenses Operating income 2. What is the expected contribution margin ratio? % 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 (If required, round the percent to one decimal place, e.g. 15.4%.) 6. Determine the operating leverage. If required, round your answer to one decimal place, e.g. 15.4. 96