Instructions Answers are entered in the cells with gray backgrounds. Cells with non-gray backgrounds are protected and cannot be edited. An asterisk (*) will appear to the right of an incorrect entry. 1.

WOLSEY INDUSTRIES INC.

Estimated Income Statement For the Year Ended December 31, 2016

Sales

Cost of goods sold:

Direct materials

Direct labor

Factory overhead

Cost of goods sold

Gross profit

Expenses:

Selling expenses

Sales salaries and commissions

Advertising

Travel

Miscellaneous selling expense Total selling expenses Administrative expenses: Office and officers' salaries Supplies Miscellaneous administrative expense Total administrative expenses Total expenses Income from operations 2. Contribution margin ratio: Sales Units Unit Variable Cost Variable costs Contribution margin Sales Contribution margin ratio 3. Break-even sales: Fixed costs Sale Price - Unit Variable Cost Unit contribution margin Break-even sales (units) Sale price Break-even sales (dollars) 4. For each unit level of sales, enter the total sales dollars and total costs. The chart at right will be plotted as you enter the amounts. After all points are plotted, grab and move the labels provided at the left to identify each area.

Units Sales $ Costs $ 0 3,000 6,000 9,000 12,000 15,000 18,000 21,000 24,000 27,000 5. Margin of safety: Sale Price Units Expected sales Break-even point Margin of safety (in dollars) Expected sales Margin of safety (as a percentage of sales) 6. Operating leverage: Unit CM $ Units Contribution margin Income from operations Operating leverage