Estimated Fixed Cost			Estimated Variable Cost (per unit sold)
Production costs:
	Direct materials				$19
	Direct labor				13
	Factory overhead	$321,400			10
Selling expenses:
	Sales salaries and commissions	66,800			4
	Advertising	22,600
	Travel	5,000
	Miscellaneous selling expense	5,500			4
Administrative expenses:
	Office and officers' salaries	65,300
	Supplies	8,000			2
	Miscellaneous administrative expense	7,600			2
	Total	$502,200			$54

It is expected that 6,200 units will be sold at a price of $216 a unit. Maximum sales within the relevant range are 8,000 units.

Belmain Co.
Estimated Income Statement
For the Year Ended December 31, 20Y7
Sales			$1,339,200
Cost of goods sold:
Direct materials		$117,800
Direct labor		80,600
Factory overhead		383,400
Total cost of goods sold			581,800
Gross profit			$757,400
Expenses:
Selling expenses:
Sales salaries and commissions	$91,600
Advertising	22,600
Travel	5,000
Miscellaneous selling expense	30,300
Total selling expenses		$149,500
Administrative expenses:
Office and officers' salaries	$65,300
Supplies	20,400
Miscellaneous administrative expense	20,000
Total administrative expenses		105,700
Total expenses			255,200
Operating income			$502,200

2. What is the expected contribution margin ratio? Round to the nearest whole percent. %

3. Determine the break-even sales in units and dollars.

Units	units
Dollars	$

4. Construct a cost-volume-profit chart on your own paper. What is the break-even sales? $

5. What is the expected margin of safety in dollars and as a percentage of sales?

Dollars:	$
Percentage: (Round to the nearest whole percent.)		%

6. Determine the operating leverage. Round to one decimal place.