Contribution Margin, Break-Even Sales, Cost-Volume-Profit Chart, Margin of Safety, and Operating Leverage Wolsey Industries Inc. expects to maintain the same inventories at the end of 2013 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 Direct labor Factory overhead $46 40 $200,000 20 Selling expenses: Sales salaries and commissions 110,000 Advertising 40,000 Travel 12,000 Miscellaneous selling expense 7,600 11- Administrative expenses: Office and officers' salaries Supplies 132,000 10,000 Miscellaneous administrative expense 13,400 1 Total $525,000 $120 It is expected that 21,875 units will be sold at a nine often Estimated Income Statement For the Year Ended December 31, 20Y3 Sales Cost of goods sold: Direct materials Direct labor Factory overhead Total cost of goods sold Gross profit Expenses: Selling expenses: Sales salaries and commissions Advertising 46 X 200,000 X Travel Miscellaneous sing expense Total selling expenses Administrative expenses: Office and officers' salaries Supplies Miscellaneous administrative expense Total administrative expenses Total expenses Operating income Check My Words 46 X