ch B C. D E 1 Problem 1: 2 3 Carmen Inc, expects to maintain the same inventories at the end of 20YY as at the beginning of the year. 4 The total of all production costs for the year is therefore assumed to be equal to the cost of goods sold. 5 With this in mind, the various department heads were asked to submit estimates of the costs 6 for their departments during the year. A summary report of these estimates is as follows: 7 8 Production costs Fixed VC per unit 9 Direct materials 20 10 Direct labor 22 11 Factory overhead 120,700 15 12 Expenses 13 Selling expenses 14 Sales salaries and commissions 32,000 5 15 Advertising 10,000 16 Travel 2,200 17 Miscellaneous selling expenses 1,800 6 18 Administrative expenses 19 Office and officers' salaries 42,800 20 Supplies 5,500 21 Miscellaneous. admin expenses 5,000 22 Total 220,000 72 23 24 Number of units sold 8,000 units 25 Selling price per unit 160 per unit 26 Relevant range of production and sale 10,000 units 27 28 Required: 29 A. Prepare an estimated income statement for 20YY using the traditional format of income statement 30 B. What is the expected contribution margin ratio? 31 C. Determine the break-even sales in units and dol D. What is the expected margin of safety (MOS) in dollars and as a percentage of sales? 33 E. Determine the operating leverage. Round your answer to two decimal points. 34 Solution: NN 32 35 MSU... - ESPN: Serving spor... Fidelity Inv x Chapter 20 Weekly Activities Questions and Template.xlsx File Edit Insert Format Help Office Compatibility Mode I U 5 Row E 41 50 Column D 27 28 Required: 29 A. Prepare an estimated income statement for 20YY using the traditional format of income statement. 30 B. What is the expected contribution margin ratio? 31 C. Determine the break-even sales in units and dol 32 D. What is the expected margin of safety (MOS) in dollars and as a percentage of sales? 33 E. Determine the operating leverage. Round your answer to two decimal points. 34 35 Solution: 36 A. Traditional Income statement 37 Carmen Inc. 38 Estimated Income Statement 39 For the Year Ended December 31, 20YY 40 Sales COGS 42 DM 43 DL 44 Factory OH: 45 Total COGS 46 Gross Profit 47 Expenses 48 Selling Expenses 49 Sales salaries and commissions Advertising 51 Travel 52 Misc. selling expenses 53 Total selling expenses 54 Administrative expenses 55 Office and officers' salaries 55 Supplies 57 Misc. admin Expenses 58 Total administrative expenses 59 Total expenses 60 Operating income 61 62 B. Contribution Margin Ratio (CMR) CMR = CMU/SP per unit 64 CMU per unit CMR (express in %) 66 C. Break-even sales in units and dollars: 68 BEU = FC/CMU units 69 BE$ = FCICMR 70 D. Margin of safety in $ and as a % of sales 72 MOS in $ = Sales - BE$ 73 MOS as % of sales = MOS in $/Sales 74 75 E. Operating leverage (OL) 76 OL = CM/NI 77 CM = CMU x # of units sold 78 Operating leverage = 79 80 81 198888888889 Problem 1 Problum 2 Problom 3