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Hello! I need help with the following! Wolsey Industries Inc. expects to maintain the same inventories at the end of 2016 as at the beginning
Hello! I need help with the following!
Wolsey Industries Inc. expects to maintain the same inventories at the end of 2016 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 Fixed Variable Cost (per Cost unit sold) 2 Production costs Direct materials $66.00 Direct labor 32.00 $190,000.00 Factory overhead 20,00 Selling expenses: 6 102,000.00 Sales salaries and commissions 6.00 7 Advertising 37,000.00 Travel 10,000.00 Miscellaneous selling expense 7,800.00 1,00 10 11 Administrative expenses: 138,400.00 Office and officers' salaries 17 Supplies 12,000.00 2.00 1 Miscellaneous administrative expense 14,000.00 100 14 $128.00 $511,200.00 Total 15 It is expected that 21,300 units will be sold at a price of $160 a unit. Maximum sales within the relevant range are 25,900 units. Labels and Amount Descriptions Advertising Contribution margin Cost of goods sold Direct labor Direct materials Expenses Factory overhead Gross profit Income from operations Manufacturing margin Miscellaneous administrative expense Miscellaneous selling expense Office and officers' salaries Sales Sales salaries and commissions Supplies Total administrative expenses Total expenses Total selling expenses Travel Variable cost of goods sold Wolsey Industries Inc. Estimated Income Statement For the Year Ended December 31, 2016 1Sales Cost of goods sold: Direct materials Direct labor Factory overhead Cost of goods sold 7 Gross profit Total selling expenses Selling expenses: Sales salaries and commissions 10 Advertising 11 Travel 12 Miscellaneous selling expense 11 Total selling expenses 14 Administrative expenses: 15 Office and officers' salaries 16 Supplies 17 Miscellaneous administrative expense 18 Total administrative expenses 19 Total expenses 20 Income from operations 21 B. What is the expected contribution margin ratio? % C. Determine the break-even sales in units and dollars. Start by using the contribution margin ratio (part B.) and then round your answers to the nearest whole number Units units Dollars D. Construct a cost-volume-profit chart on your own paper. What is the break-even sales? Final Questions E. What is the expected margin of safety in dollars and as a percentage of sales? If applicable, use amounts previously computed and then round your answers to the nearest whole number. Dollars Percentage % F Determine the operating leverage. Round to one decimal placeStep by Step Solution
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