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 Fixed Cost Estimated Variable Cost (per unit sold) Production costs: Direct materials — $26 Direct labor — 17 Factory overhead $265,400 13 Selling expenses: Sales salaries and commissions 55,200 6 Advertising 18,700 — Travel 4,100 — Miscellaneous selling expense 4,600 5 Administrative expenses: Office and officers' salaries 53,900 — Supplies 6,600 2 Miscellaneous administrative expense 6,220 3 Total $414,720 $72 It is expected that 8,960 units will be sold at a price of $144 a unit. Maximum sales within the relevant range are 11,000 units. Required: 1. Prepare an estimated income statement for 20Y7. Belmain Co.Estimated Income StatementFor the Year Ended December 31, 20Y7 - Select - $ Cost of goods sold: - Select - $ - Select - $ - Select - $ Total cost of goods sold $ Gross profit $ Expenses: Selling expenses: - Select - $ - Select - $ - Select - $ - Select - $ Total selling expenses $ Administrative expenses: - Select - $ - Select - $ - Select - $ Total administrative expenses $ Total expenses $ Operating income $ Question Content Area 2. What is the expected contribution margin ratio? Round to the nearest whole percent. fill in the blank 1 % 3. Determine the break-even sales in units and dollars. Units fill in the blank 2 units Dollars $fill in the blank 3

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 Fixed Cost Estimated Variable Cost (per unit sold) Production costs: Direct materials — $26 Direct labor — 17 Factory overhead $265,400 13 Selling expenses: Sales salaries and commissions 55,200 6 Advertising 18,700 — Travel 4,100 — Miscellaneous selling expense 4,600 5 Administrative expenses: Office and officers' salaries 53,900 — Supplies 6,600 2 Miscellaneous administrative expense 6,220 3 Total $414,720 $72 It is expected that 8,960 units will be sold at a price of $144 a unit. Maximum sales within the relevant range are 11,000 units. Required: 1. Prepare an estimated income statement for 20Y7. Belmain Co.Estimated Income StatementFor the Year Ended December 31, 20Y7 - Select - $ Cost of goods sold: - Select - $ - Select - $ - Select - $ Total cost of goods sold $ Gross profit $ Expenses: Selling expenses: - Select - $ - Select - $ - Select - $ - Select - $ Total selling expenses $ Administrative expenses: - Select - $ - Select - $ - Select - $ Total administrative expenses $ Total expenses $ Operating income $ Question Content Area 2. What is the expected contribution margin ratio? Round to the nearest whole percent. fill in the blank 1 % 3. Determine the break-even sales in units and dollars. Units fill in the blank 2 units Dollars $fill in the blank 3

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter6: Cost-volume-profit Analysis

Section: Chapter Questions

Problem 6PB: Contribution margin, break-even sales, cost-volume-profit chart, margin of safety, and operating...

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Question Content Area

2. What is the expected contribution margin ratio? Round to the nearest whole percent.
fill in the blank 1 %

3. Determine the break-even sales in units and dollars.

Units	fill in the blank 2 units
Dollars	$fill in the blank 3

4. Construct a cost-volume-profit chart on your own paper. What is the break-even sales?
$ fill in the blank 4

5. What is the expected margin of safety in dollars and as a percentage of sales?

Dollars:	$ fill in the blank 5
Percentage: (Round to the nearest whole percent.)	fill in the blank 6	%

6. Determine the operating leverage. Round to one decimal place.
fill in the blank 7

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	Estimated Fixed Cost		Estimated Variable Cost (per unit sold)
Production costs:
	Direct materials	—	$26
	Direct labor	—	17
	Factory overhead	$265,400	13
Selling expenses:
	Sales salaries and commissions	55,200	6
	Advertising	18,700	—
	Travel	4,100	—
	Miscellaneous selling expense	4,600	5
Administrative expenses:
	Office and officers' salaries	53,900	—
	Supplies	6,600	2
	Miscellaneous administrative expense	6,220	3
	Total	$414,720	$72

- Select -			$
Cost of goods sold:
- Select -		$
- Select -		$
- Select -		$
Total cost of goods sold			$
Gross profit			$
Expenses:
Selling expenses:
- Select -	$
- Select -	$
- Select -	$
- Select -	$
Total selling expenses		$
Administrative expenses:
- Select -	$
- Select -	$
- Select -	$
Total administrative expenses		$
Total expenses			$
Operating income			$