Answered step by step
Verified Expert Solution
Question
1 Approved Answer
LD Paste Font Alignment Number Format as Table Cell Styles Cells Editing Ideas Sens 134 B C D E F G H J K L
LD Paste Font Alignment Number Format as Table Cell Styles Cells Editing Ideas Sens 134 B C D E F G H J K L M N 73 14 1. 15 PR 20-6B Contribution Margin, Break-Even Sales, Cost-Volume-Profit Chart, Margin of Safety, and Operating Leverage Obj. 2, 3, 4, 5 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 18 17 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 19 is as follows: Balmain Co Estimated Income Statement For the Year Ended December 31, 2017 18 Estimated Fixed Cost Estimated Variable cost (per unit sold) $50.00 30,00 6.00 $ 350,000 116,000 4,000 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 Operating income Production costs: Direct materials Direct labor... Factory overhead Selling expenses: Sales salaries and commissions Advertising... Travel... Miscellaneous selling expense Administrative expenses Office and officers' salaries Supplies.................... Miscellaneous administrative expense Total ......................... 4.00 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 2 42 340,000 116,000 4,000 2.300 1.00 $ 325,000 325,000 6.000 8.700 $1,152.000 4.00 1.00 $96.00 It is expected that 12,000 units will be sold at a price of $240 a unit. Maximum sales within the a . relevant range are 18,000 units. Contribution margin ratio: Sales Units x Unit Variable Cost 45 Instructions Variable costs Contribution margin Sales Contribution margin ratio 47 1. Prepare an estimated income statement for 2017, 2. What is the expected contribution margin ratio? 3. Determine the break even sales in units and dollars 49 50 51 3. Pr. 2016)-6B +
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started