Obj. 2, 3, 4, 5 Inc. expects to maintain the same inventories at the end of 20Y3 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: Details It is expected that 21,875 units will be sold at a price of $160 a unit. Maximum sales within the relevant range are 27,000 units. 1. Prepare an estimated income statement for 20Y3. 2. What is the expected contribution margin ratio? Answer: Check Figure: 25% 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. 1. Wolsey Industrios Inc. Estimated Income Statement For the Yoar Endod December 31,20Y3 Sales Cost of goods sold: Direct materials Direct labor Factory overhead Cost of goods sold Gross profit Expenses: Selling expenses: Sales salaries and commissions Advertising Travel Miscellaneous selling expense Total solling expenses Administrative expenses: Otfice and officers' salaries Supplies Miscellaneous administrative expense Total administrative expenses Total expenses Operating income 2. Contribution margin ratio: Sales Variable costs Contribution margin Sales Contribution margin ratio 3. Break-even sales: Fixed costs Sale Price - Unit Variable Cost 41422.Contributionmarginratio: Sales 3. Break-even sales: Flxed costs 1. For esch unit level of sales, enter the total sales dollars and total costs. The chart at right will be ploeed as you enter the amounta. Aner all points are pletted, grab and move the labels provided at the len to identiy each area. Margin of safety: Expected sales Break-even point Margin of safety (in dollars) Expected sales Margin of safety (as a percentage of sales) 6. \begin{tabular}{|c|} \hline Sale Price \\ \hline \\ \hline \end{tabular} \begin{tabular}{|c|} \hline Units \\ \hline \\ \hline \end{tabular} \begin{tabular}{|l|} \hline \\ \hline \\ \hline \\ \hline \\ \hline \\ \hline \end{tabular} Operating leverage: Contribution margin Operating income Operating leverage