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(Solved by Expert Tutors) Contribution margin, break- even sales, cost-volume-profit chart, margin


leverageBlythe Industries Inc. expects to maintain the same inventories at the end of 2012 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 2012. A summary report of these estimates is as follows:Estimated fixed costs Estimated Variable cost(per unit sold)Production costs: Direct materials $30Direct Labor 20Factory overhead $340,000 11Selling expenses:Sales salaries and commission 80,000 5Advertising 32,000Travel 8,00Miscellaneous selling expense 7,600 5Administrative expenses:Office and officers' salaries 120,000Supplies 8,000 2Miscellaneous administrative expense 4,400 2 total $600,000 $75It is expected that 8,000 units will be sold at price of $200 a unit. Maximum sales within the relevant range are 9,000 units.Instructions1. Prepare an estimated income statement for 20122. What is the expected contribution margin ratio?3. Determine the break-even sales in units and dollars.4. Construct a cost-volume-profit chart indicating the break-even sales.5. What is the expected margin of safety in dollars and as a percentage of sales?6. Determine the operating leverage.I found everything else I need help on question 1

 


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Apr 19, 2020

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