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Wolsey Industries Inc. expects to maintain the same inventories at the end of 20Y8 as at the beginning of the year. The total of all
Wolsey Industries Inc. expects to maintain the same inventories at the end of 20Y8 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: 6 7 8 9 10 11 12 13 14 15 Production costs: Direct materials Direct Labor Factory overhead Selling expenses: Sales salaries and commissions Advertising Travel Miscellaneous selling expense Administrative expenses: Ofce and ofcers' salaries Suppnes Miscellaneous administrative expense Total Estimated Fixed Cost $190,000.00 101,000.00 36,000.00 14,000.00 7,600.00 137,000.00 11,000.00 14,600.00 $511,200.00 Estimated Variable Cost (per unit sold) $50.00 32.00 20.00 12.00 1.00 4.00 1.00 $120.00 It is expected that 21,300 units will be sold at a price of $160 a unit. Maximum sales within the relevant range are 26,175 units. 9 10 11 12 15 14 (Label) (Label) Selling expenses: Wolsey Industries Inc. Estimated Income Statement {Label} 15 Administrative expenses: 16 17 18 19 20 Total expenses 21B. What is the expected contribution margin ratio? C. Determine the breakeven sales in units and dollars. Start by using the contribution margin ratio (part B.) and then round your answers to the nearest whole number. Units units Dollars D. Construct a cost-volumeprofit 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? If applicable, use amounts previously computed and then round your answers to the nearest whole number. Dollars Percentage F. Determine the operating leverage. Round to one decimal place
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