Wolsey Industries Inc.

Contribution 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 2013 as at the beginning of the year. The total of all production costs for the year is therefore assumed to be 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 low at the cost of goods sold Estimated Fixed Cost Estimated Variable Cost (per unit sold) Production costs: Direct materials Direct labor Factory overhead $200,000 Selling expenses Sales salaries and commission 110,000 Advertising 10,000 12.000 Miscellaneous selling expense 7,600 Administrative expenses Office and officers salaries Supplies 132,000 10.000 13.400 Miscellaneous administrative expense 5525,000 $120 Total unit Maximum sales within the relevant range are 27,000 units It is expected that 21,875 units will be sold at a price of sic 1. Prepare an estimated income statement for 20Y3. Wolsey Industries Inc. Estimated Income Statement For the Year Ended December 31, 2043 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 2. What is the expected contribution margin ratio? 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 (If required, round the percent to one decimal place, e.g. 15.4%) 6. Determine the operating leverage. If required, round your answer to one decimal place, e.g. 15.4. Check My Work Assignment Score: 71.54% A s D F G H N C Contribution 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 2013 as at the beginning of the year. The total of all production costs for the year is therefore assumed to be 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 low at the cost of goods sold Estimated Fixed Cost Estimated Variable Cost (per unit sold) Production costs: Direct materials Direct labor Factory overhead $200,000 Selling expenses Sales salaries and commission 110,000 Advertising 10,000 12.000 Miscellaneous selling expense 7,600 Administrative expenses Office and officers salaries Supplies 132,000 10.000 13.400 Miscellaneous administrative expense 5525,000 $120 Total unit Maximum sales within the relevant range are 27,000 units It is expected that 21,875 units will be sold at a price of sic 1. Prepare an estimated income statement for 20Y3. Wolsey Industries Inc. Estimated Income Statement For the Year Ended December 31, 2043 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 2. What is the expected contribution margin ratio? 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 (If required, round the percent to one decimal place, e.g. 15.4%) 6. Determine the operating leverage. If required, round your answer to one decimal place, e.g. 15.4. Check My Work Assignment Score: 71.54% A s D F G H N C