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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
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. A summary report of these estimates is as follows: Income Statement Wolsey Industries Inc. Score: 102/152 Estimated Income Statement For the Year Ended December 31, 2016 1 Sales 2 Cost of goods sold: 3 Direct materials Direct labor 5 Factory overhead Cost of goods sold Gross profit Expenses: Selling expenses Sales salaries and commissions Advertising Travel Miscellaneous selling expense eBook Calculator Print Item Contribution margin, break-even sales, cost-volume-profit chart, margin of safety, and operating leverage Instructions Labels and Amount Descriptions Income Statement Additional Questions Final Questi Instructions Income Statement GIUSSION 8 Expenses: Selling expenses Sales salaries and commissions Advertising Travel Miscellaneous selling expense 13 Total selling expenses 15 Administrative expenses: Office and officers' salaries 16 Supplies Miscellaneous administrative expense Contribution margin, break-even sales, cost-volume-profit chart, margin of safety, and operating leverage Instructions Labels and Amount Descriptions Income Statement Additional Questions Final Questions Instructions Estimated Fixed Cost EN Variable Cost per unit sold Production costs: Directors 556.00 Direct labor 36.00 5 Factory overhead 5194,000.00 20.00 Selling expenses: 7 Sales salaries and commissions 110.000.00 800 Advertising 42,000.00 " Travel 15.000.00 10 Miscellaneous selling expense 7,000.00 11 A s tive expenses 11 124600.00 Office and officers' salaries Supplies Miscellaneous administrative pense 15 14 8.000.00 15.000.00 15 Total $513.600.00 $128.00 Instructions It is expected that 21,400 units will be sold at a price of $160 a unit. Maximum sales within the relevant range are 26,275 units. Required: A. Prepare an estimated income statement for 2016. Refer to the Labels and Amount Descriptions list provided for the exact wording of the answer choices for text entries. B. What is the expected contribution margin ratio? C. Determine the break-even sales in units and dollars. Round your answers to the nearest whole number. D. Construct a cost volume profit chart on your own paper. What is the break even sales? E. What is the expected margin of safety in dollars and as a percentage of sales? Round your answers to the nearest whole number F Determine the operating leverage. Round to one decinal place
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. A summary report of these estimates is as follows:
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