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Youngsville Industries Inc. expects to maintain the same inventories at the end of 20Y5 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				$48
	Direct Labor				$38
	Factory Overhead		$150,000		$25
Selling Expenses:
	Sales salaries and commissions		$125,000		$10
	Advertising		$50,000
	Travel		$15,000
	Miscellaneous selling expense		$10,000		$2
Administrative Expenses:
	Office and officers' salaries		$140,000
	Supplies		$10,000		$5
	Miscellaneous administrative expense		$10,000		$2
Total			$510,000		$130

It is expected that 22,175 units will be sold at a price of $170 a unit. Maximum sales within the relevant range are 27,500 units.

Instructions: Using formulas/functions wherever available, complete the following on the Input tab

1. Prepare an estimated income statement for 20Y5.
2. What is the expected contribution margin ratio?
3. Determine the break-even sales in units and dollars.
4. Construct a cost-volume-profit chart indicating the break-even sales.
5. What is the expected margin of safety in dollars and as a percentage of sales?
6. Determine the operating leverage.
7. Once you have completed the Input worksheet, save the file as Excel3-lastname (using your last name). Then upload it using the link in the assignment title.

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