Homework Chapter zu 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 productior costs for the year is therefore assumed to be equal to the cost of goods sold. With this in mind, the various department heads werd 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 Direct labor Factory overhead $198,900 Selling expenses: Sales salaries and commissions 41,300 Advertising 14,000 Travel 3,100 Miscellaneous selling expense 3,400 Administrative expenses: Office and officers' salaries 40,400 Supplies 5,000 Miscellaneous administrative expense 4,700 Total $310,800 $84 It is expected that 7,400 units will be sold at a price of $168 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 1. Prepare an estimated income statement for 2017. Belmain Co. Estimated Income Statement For the Year Ended December 31, 2017 Cost of goods sold: Total cost of goods sold Gross profit Expenses: Selling expenses: Total selling expenses Administrative expenses: Total administrative expenses Total expenses Operating income Total selling expenses Administrative expenses: Total administrative expenses Total expenses 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