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Contribution Margin, Break-Even Sales, Cost-Volume-Profit Chart, Margin of Safety, and Operating Leverage Belmain Co. expects to maintain the same inventories at the end of 2017 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: Estimated Fixed Cost Estimated Variable Cost (per unit sold) Production costs: Direct materials $30 Direct labor 20 Factory overhead $1,058,000 15 Selling expenses: Sales salaries and commissions 219,900 7 Advertising 74,400 Travel 16,500 Miscellaneous selling expense 18,200 6 Administrative expenses: Office and officers' salaries 214,900 Supplies 26,400 3 mm Miscellaneous administrative expense 24,820 3 Total $1,653,120 $84 It is expected that 9,020 units will be sold at a price of $420 a unit. Maximum sales within the relevant range are 11,000 units. Required: Required: 1. Prepare an estimated income statement for 20Y7. Belmain Co. Estimated Income Statement For the Year Ended December 31, 2017 3,788,400.00 Sales Cost of goods sold: Direct materials 270,600 180,400 Direct labor 1,193,300 Factory overhead 1,644,300.00 Total cost of goods sold 2,144,100.00 Gross profit Expenses Selling expenses Sales salaries and commissions 283,040 Advertising 74,400 Travel 16,500 Miscellaneous selling expense 72,320 Total selling expenses 446,260.00 Administrative expenses: Office and officers' salaries 214,900 Supplies 53,460 Miscellaneous administrative eynense 51.880 1. Use the data to compute the total costs. Remember that some of the costs have a fixed and a variable cost component 2. What is the expected contribution margin ratio? Round to the nearest whole percent. SO 3. Determine the break-even sales in units and dollars. Units 4,920.00 units Dollars $ 2,066,400.00 V 4. Construct a cost-volume-profit chart on your own paper. What is the break-even sales? $ 2.066,400.00 5. What is the expected margin of safety in dollars and as a percentage of sales? Dollars: $ 1,722,000.00 Percentage: (Round to the nearest whole percent.) 45 % 6. Determine the operating leverage. Round to one decimal place. 45 Feedbacs Chacky Won 2. Sales minus variable cost equals contribution margin. Contribution margin divided by sales equals contribution margin ratio 3. Fixed costs divided by unit contribution margin equals break-even sales in units. Break-even units times unit sale

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