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Belmain Co. 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:

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Belmain Co. 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. summary report of these estimates is as follows: Estimated Estimated Variable Cost (per unit sold) Fixed Cost Production costs: Direct materials $13 Direct labor 9 Factory overhead $166,700 6 Selling expenses: Sales salaries and commissions 34,600 Advertising 11,700 Travel 2,600 Miscellaneous selling expense 2,900 Administrative expenses: Office and officers' salaries 33,900 Supplies 1 4,200 Miscellaneous administrative expense 3,800 1 $260,400 $36 Total It is expected that 6,200 units will be sold at a price of $120 a unit. Maximum sales within the relevant range are 8,000 units 2. What is the expected contribution margin ratio? Round to the nearest whole percent. 72 X % 3. Determine the break-even sales in units and dollars. 3,027.91 X units Units 363,349 X units Dollars 4. Construct a cost-volume-profit chart on your own paper. What is the break-even sales? 363,349.20 x $ 5. What is the expected margin of safety in dollars and as a percentage of sales? 380,640 X Dollars: 51 X % Percentage: (Round to the nearest whole percent.) 6. Determine the operating leverage. Round to one decimal place. 1.7 X Cost of goods sold: Direct materials 80,600 Direct labor 55,800 Factory overhead 203,900 340,300 Total cost of goods sold Gross profit 403,700 Expenses: Selling expenses: Sales salaries and commissions 53,200 Advertising 11,700 Travel 2,600 Miscellaneous selling expense 21,500 Total selling expenses 89,000 Administrative expenses: Office and officers' salaries 33,900 Supplies 10,400 Miscellaneous administrative expense 10,000 54,300 Total administrative expenses 143,300 Total expenses 260 400

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