High-Low Method Ziegler Inc. has decided to use the high-low method to estimate the total cost and the fixed and variable cost components of the total cost. The data for various levels of production are as follows: Units Produced Total Costs 1,235 $102,600 2,270 136,340 3,135 159,600 a. Determine the variable cost per unit and the total fixed cost. Variable cost: (Round to the nearest dollar.) per unit Total fixed cost: b. Based on part (a), estimate the total cost for 1,570 units of production. Total cost for 1,570 units: 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 Fixed Cost Estimated Variable Cost (per unit sold) Production costs: Direct materials $13 Direct labor 9 Factory overhead $70,000 6 Selling expenses: Sales salaries and commissions 14,600 3 Advertising 4,900 Travel 1,100 Miscellaneous selling expense 1,200 3 Administrative expenses: Office and officers' salaries 14,200 Supplies 1,800 1 Miscellaneous administrative expense 1,640 1 Total $109.440 $36 Total $109,440 $36 It is expected that 6,840 units will be sold at a price of $72 a unit. Maximum sales within the relevant range are 9,000 units. Required: 1. Prepare an estimated income statement for 2017. Belmain Co. Estimated Income Statement For the Year Ended December 31, 2047 Direct materials Cost of goods sold: Total cost of goods sold $ Gross profit Expenses: Selling expenses: W10 Total selling expenses Administrative expenses: O Total administrative expenses Total expenses od Operating income 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 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