Question

eBook Calculator 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 2047 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 departhents 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 $50.00 Direct labor 30.00 Factory overhead $350,000 6.00 4.00 Selling expenses Sales salaries and commissions Advertising Travel Miscellaneous selling expense Administrative expenses Office and officers' salaries Supplies Miscellaneous administrative expense 340,000 116,000 4,000 2,300 1.00 325,000 6,000 4.00 8,700 1.00 Total $1,152.000 $96.00 It is expected that 12,000 units will be sold at a price of $240 a unit. Maximum sales within the relevant range are 18,000 units. Check My Work Previous Next > All work saved Emalico Save and Exit Submit Assignment for Grading Type here to search O

Answer 1

PREPARATION OF INCOME STATEMENT:

BETMAN CO. Income Statement For the year ended December 31, 20Y7
Sales (12000units × $240)			$2880000
Cost of goods sold:
Direct materails (12000units × $50)		$600000
Direct labor (12000units×$30)		$360000
Factory overheads [$350000+(12000units×$6)]		$422000
Total Cost of goods sold			($1382000)
Gross profit			$1498000
Expenses:
Selling Expenses:
Sales salaries and commissions [$340000+(12000units×4)]	$388000
Advertising	$116000
Travel	$4000
Miscellaneous selling expense [$2300+(12000units×$1)]	$14300
Total Selling expenses		$522300
Administrative expenses:
Office and officers salaries	$325000
Supplies [$6000+(12000units×$4)]	$54000
Miscellaneous administrative expenses [$8700+(12000units×1)]	$20700
Total Administrative expenses		$399700
Total expenses			($922000)
Income from Operations			$576000

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