Question

PLEASE ANSWER ALL PARTS OF THE QUESTION

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 Fixed Cost Estimated Variable Cost (per unit sold) Production costs: Direct materials $13 Direct labor 9 Factory overhead $156,700 6 Selling expenses: Sales salaries and commissions 3 Advertising 32,600 11,000 2,400 2,700 Travel Miscellaneous selling expense 3 Administrative expenses: Office and officers' salaries 31,800 3,900 1 Supplies Miscellaneous administrative expense 3,700 1 Total $244,800 $36

Answer 1

ANSWER 1

INCOME STATEMENT

DETAILS	AMOUNT($)	AMOUNT($)
SALES(10200*72)		734400
COST OF GOOD SOLD
DIRECT MATERAIL(10200*13)	132600
DIRECT LABOUR(10200*9)	91800
FACTORY OVERHEAD{156700+(10200*6)}	217900
TOTAL COST OF GOOD SOLD		442300
GROSS PROFIT		292100
EXPENSES
SELLING EXPENSES
SALES SALARIES AND COMMISSION{32600+(10200*3)}	63200
ADVERTSING	11000
TRAVEL	2400
MISCELLANEOUS SELLING EXPENSE{2700+(10200*3)}`	33300
TOTAL SELLING EXPENSE		109900
ADMIN EXPENSE
OFFICE & OFFICERS SALARIES	31800
SUPPLIES{3900+(10200*1)}	14100
MISCELLANEOUS SALARY EXPENSE{3700+(10200*1)}	13900
TOTAL ADMIN EXPENSE		59800
TOTAL EXPENSES		169700
INCOME FROM OPERATIONS		122400

ANSWER 2

CONTRIBUTION MARGIN RATIO=50%

WORKINGS

CONTRIBUTION MARGIN RATIO=TOTAL REVENUE-TOTAL VARIABLE COST/TOTAL REVENUE*100%

=734400-367200/734400*100%=50%

ANSWER 3

BREAK EVEN SALES

UNITS=6800 UNITS

DOLLOR=$489600

WORKINGS

BEP(UNITS)=FIXED COST/SP PER UNIT-VC PER UNIT=244800/72-36=6800 UNITS

BEP(DOLLOR)=SP PER UNIT*BEP(UNITS)=$72*6800=$489600

ANSWER 4

BEP=$489600

ANSWER 5

Photos - WhatsApp Image 2020-09-23 at 09.51.53.jpeg See all photos + Add to t % Edit & Create Share 6 7000001 Sales 6000001 Break Even point 5000007 Total Cost 400000 300000 Fixed cost 200000 Loo000 2000 3000 4000 5000 6000 7000 80oo. No. of Units Activate Windows Go to Settings to activate Windows. Type here to search ÖT I ENG 09:59 23-09-2020

MARGIN OF SAFETY

DOLLOR=$244800

PERCENTAGE=33%

WORKING

MOS(DOLLOR)=CURRENT SALES-BEP(SALES)=734400-489600=$244800

MOS(%)=CURRENT SALE-BEP(SALES)/CURRENT SALE*100%=734400-489600/734400*100%=33.33%

ANSWER 6

OPERATING LEVERAGE=3

WORKING

OPEARATING LEVERAGE=CONTRIBUTION/INCOME FROM OPERATION

=10200*36/122400

=367200/122400=3