PR 19-6A Contributions margin, break-even sales, cost-volume-profit chart, margin of safety, and operating leverage Wolsey Industries Inc. expects to maintain the same inventories at the end of 2016 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. Estimated Estimated Variable Cost Fixed Cost (per unit sold Production costs: Direct materials - $46 Direct labor. - 40 Factory overhead $200,000 20 Selling expenses: Sales salaries and commissions 110,000 8 Advertising. 40,000 - Travel 12,000 - Miscellaneous selling expense.. 7,600 1 Administrative expenses: Office and officers salaries 132,000 - Supplies.. 10,000 4 Miscellaneous administrative expense 13,400 1 Total.. $525,000 $120