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Contribution Margin, Break-Even Sales, Cost-Volume-Profit Chart, Margin of Safety, and Operating Leverage Belmain Co. expects...

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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 Estimated Variable Cost Fixed Cost (per unit sold) Production costs: Direct materials $24 Direct labor 16 $324,400 12 Factory overhead Selling expenses Sales salaries and commissions 67,400 Advertising 22,800 Travel 5,100 Miscellaneous selling expense 5,600 Administrative expenses: Office and officers' salaries 65,900 Supplies 8,100 2 Miscellaneous administrative expense 7,580 3 $506,880 $66 Total It is expected that 8,320 units will be sold at a price of $165 a unit. Maximum sales within the relevant range are 10,000 units. Required: 1. Prepare an estimated Income statement for 2017.

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