1. Why is it important to separate out fixed and variable costs?How does this help managers make decisions?

Review the attachment and review the problems

'li'llolse}|r Industries Inc. Estimated Income Statement For the Year Ended December 31, 201'} Sales 3 3,500,000 lCost of goods sold: Direct materials $ 1,006,250 Direct labor 675,000 Factory overhead 637,500 Cost of goods sold 2,518,750 Gross prot 6 981,250 Expenses: Selling expenses Sales salaries and commissions 5 285,000 Advertising 40,000 Travel 12,000 Miscellaneous selling expense 29,475 Total selling expenses 5 366,475 Administrative expenses: Ofce and ofcers' salaries $ 132,000 Supplies 97,500 Miscellaneous administrative expense 35,275 Total administrative expenses 264,775 I Total expenses 631,250 Income from operations 5 350,000 Contribution margin ratio: Sales Units 1-: Unit Variable Cost Variable costs I II |:| Contribution margin Sales Contribution margin ratio Break-even sales: Fixed costs Sale Price Unit Variable Cost Unit contribution margin |:| |:| Break-even sales {units} Sale price Break-even sales {dollars} 4. For eael'l :lll'lllil-EVEI of sales, enter the total sales dollars and tart.- After all points are plotted, grab and move the labels provided a \fPR 5-6A Contribution margin, break-even sales, cost-volume-profit chart, Obj. 2, 3, 4, 5 margin of safety, and operating leverage Wolsey Industries 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: Estimated Estimated Variable Cost Find Cost (per unit sold} Production costs: Direct materiais ............................. S 46 Direct labor ................................ 40 Factory overhead ........................... $200,000 20 Selling expenses: Sales salaries and commissions .............. 110,000 8 Advertising ................................. 40,000 Travel ...................................... 12,000 Miscellaneous selling expense .............. 7,600 1 Administrative expenses: Ofce and ofcers' salaries .................. 132,000 Supplies .................................... 10,000 4 Miscellaneous administrative expense ........ 13,400 _1 Total ........................................... $525,000 $1 20 II 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