Calculator Contribution Margin, Break-Even Sales,Cost-Volume-Profit Chart,Margin of Safety, andOperating Leverage Belmain Co. expects to maintain...
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Contribution Margin, Break-Even Sales,Cost-Volume-Profit Chart,Margin of Safety, andOperating Leverage 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: EstimatedFixed CostEstimated Variable Cost(per unit sold)Production costs:Direct materials$17Direct labor12Factory overhead$626,7009Selling expenses:Sales salaries and commissions130,2004Advertising44,100Travel9,800Miscellaneous selling expense10,8003Administrative expenses:Office and officers' salaries127,300Supplies15,7001Miscellaneous administrative expense14,6002Total$979,200$48 It is expected that 10,200 units will be sold at a price of $192 a unit. Maximum sales within therelevant rangeare 13,000 units
6. Determine the operating leverage. Round to one decimal place.
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