Obj. 2, 3,4, 5 expects to maintain the same inventories at the end of 20Y7 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: Details It is expected that 12,000 units will be sold at a price of $240 a unit. Maximum sales within the relevant range are 18,000 units. 1. Prepare an estimated income statement for 20Y7. 2. What is the expected contribution margin ratio? 3. Determine the break-even sales in units and dollars. 4. Construct a cost-volume-profit chart indicating the break-even sales. 5. What is the expected margin of safety in dollars and as a percentage of sales? Round to one decimal place. 6. Determine the operating leverage. Estimated Income Statement For the Yoar Endod Docember 31,20Y7 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 oxpenses Administrative expenses: Office and officers' salaries Supplies Miscellaneous administrative expense Total administrative expenses Total expenses Operating income Contrbution margin ratio: Soles Variable costs Contribution margin Sales Contribution margin ratio 5. Margin of safety: \begin{tabular}{l} Expected sales \\ Break-even point \\ Margin of safety (in dolars) \\ Expected sales \\ Margin of safety (as a percentage of sales) \\ \hline \end{tabular} 6. Operating leverage: Contribution margin Operating income Operating leverage