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 2017 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 Fixed Cost (per unit sold) Production costs: Direct materials $24 Direct labor 16 Factory overhead $707,100 12 Selling expenses: Sales salaries and commissions 146,900 5 Advertising 49,700 Travel 11,000 Miscellaneous selling expense 12,200 4 Administrative expenses: Office and officers' salaries 143,600 Supplies 17,700 2 Miscellaneous administrative expense 16,640 3 Total $1,104,840 $66 It is expected that 8,680 units will be sold at a price of $264 a unit. Maximum sales within the relevant range are 11,000 units. Required: 1. Prepare an estimated income statement for 2017. Belmain Co. Estimated Income Statement For the Year Ended December 31, 2017 Sales 2,291,520 Cost of goods sold: Direct materials 208,320 Direct labor 138.880 Factory overhead 811,260 Total cost of goods sold 1,158,460 1,133,060 Gross profit Expenses: Selling expenses: Sales salaries and commissions 190,300 Advertising 49,700 Travel 11,000 Miscellaneous selling expense 46,920 warren_0000_00 297.920 Total selling expenses Administrative expenses: Office and officers' salaries 143,600 Supplies 35,060 Miscellaneous administrative expense 42,680 Total administrative expenses 221,340 Total expenses 519,260 Income from operations 613,800 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 units 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