2. What is the expected contribution margin ratio? Round to the nearest whole percent. % 3. Determine the break-even sales in units and dollars. Units units Dollars 4. Construct a cost-volume-profit chart on your own paper. What is the break-even sales? 2$ 5. What is the expected margin of safety in dollars and as a percentage of sales? Dollars: $ Percentage: (Round to the nearest whole percent.) % 6. Determine the operating leverage. Round to one decimal place.

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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2. What is the expected contribution margin ratio? Round to the nearest whole percent.
3. Determine the break-even sales in units and dollars.
Units
units
Dollars
4. Construct a cost-volume-profit chart on your own paper. What is the break-even sales?
2$
5. What is the expected margin of safety in dollars and as a percentage of sales?
Dollars:
Percentage: (Round to the nearest whole percent.)
%
6. Determine the operating leverage. Round to one decimal place.
Transcribed Image Text:2. What is the expected contribution margin ratio? Round to the nearest whole percent. 3. Determine the break-even sales in units and dollars. Units units Dollars 4. Construct a cost-volume-profit chart on your own paper. What is the break-even sales? 2$ 5. What is the expected margin of safety in dollars and as a percentage of sales? Dollars: Percentage: (Round to the nearest whole percent.) % 6. Determine the operating leverage. Round to one decimal place.
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:
Estimated
Estimated Variable Cost
Fixed Cost
(per unit sold)
Production costs:
Direct materials
$22
Direct labor
14
Factory overhead
$414,000
11
Selling expenses:
Sales salaries and commissions
86,000
Advertising
29,100
Travel
6,500
Miscellaneous selling expense
7,100
4
Administrative expenses:
Office and officers' salaries
84,100
Supplies
10,300
2
Miscellaneous administrative expense
9,700
2
Total
$646,800
$60
It is expected that 7,920 units will be sold at a price of $200 a unit. Maximum sales within the relevant range are 10,000 units.
Required:
1.
Prepare an estimated income statement for 20Y7.
Transcribed Image Text: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: Estimated Estimated Variable Cost Fixed Cost (per unit sold) Production costs: Direct materials $22 Direct labor 14 Factory overhead $414,000 11 Selling expenses: Sales salaries and commissions 86,000 Advertising 29,100 Travel 6,500 Miscellaneous selling expense 7,100 4 Administrative expenses: Office and officers' salaries 84,100 Supplies 10,300 2 Miscellaneous administrative expense 9,700 2 Total $646,800 $60 It is expected that 7,920 units will be sold at a price of $200 a unit. Maximum sales within the relevant range are 10,000 units. Required: 1. Prepare an estimated income statement for 20Y7.
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