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 Cest (per unit sold) Production costs: Direct materials Direct labor Factory overhead $46 40 $200,000 201 Selling expenses: Sales salaries and commissions 110,000 Advertising 40,000 Travel 12,000 Miscellaneous selling expense 7,600 Administrative expenses Office and officers' salaries 132,000 Supplies 10,000 Miscellaneous administrative expense 13,400 Total $525,000 $120 Previous Next