Estimated Fixed Cost Estimated Variable Cost (per unit sold) Production costs: Direct materials $19 Direct labor 13 Factory overhead $261,300 10 Selling expenses: Sales salaries and commissions 54,300 4 Advertising 18,400 Travel 4,100 Miscellaneous selling expense 4,500 4 Administrative expenses: Office and officers' salaries 53,100 Supplies 6,500 2 Miscellaneous administrative expense 6,040 2 Total $408,240 $54 It is expected that 8,640 units will be sold at a price of $135 a unit. Maximum sales within the relevant range are 11,000 units. Required: Question Content Area 1. Prepare an estimated income statement for 20Y7. Belmain Co.Estimated Income StatementFor the Year Ended December 31, 20Y7 $- Select - Cost of goods sold: $- Select - - Select - - Select - Cost of goods sold fill in the blank 66c57301904a001_9 Gross profit $fill in the blank 66c57301904a001_10 Expenses: Selling expenses: $- Select - - Select - - Select - - Select - Total selling expenses $fill in the blank 66c57301904a001_19 Administrative expenses: $- Select - - Select - - Select - Total administrative expenses fill in the blank 66c57301904a001_26 Total expenses fill in the blank 66c57301904a001_27 Income from operations $fill in the blank 66c57301904a001_28 Question Content Area 2. What is the expected contribution margin ratio? Round to the nearest whole percent. fill in the blank e11b400b705d045_1 % 3. Determine the break-even sales in units and dollars. Units fill in the blank e11b400b705d045_2 units Dollars fill in the blank e11b400b705d045_3 units
Process Costing
Process costing is a sort of operation costing which is employed to determine the value of a product at each process or stage of producing process, applicable where goods produced from a series of continuous operations or procedure.
Job Costing
Job costing is adhesive costs of each and every job involved in the production processes. It is an accounting measure. It is a method which determines the cost of specific jobs, which are performed according to the consumer’s specifications. Job costing is possible only in businesses where the production is done as per the customer’s requirement. For example, some customers order to manufacture furniture as per their needs.
ABC Costing
Cost Accounting is a form of managerial accounting that helps the company in assessing the total variable cost so as to compute the cost of production. Cost accounting is generally used by the management so as to ensure better decision-making. In comparison to financial accounting, cost accounting has to follow a set standard ad can be used flexibly by the management as per their needs. The types of Cost Accounting include – Lean Accounting, Standard Costing, Marginal Costing and Activity Based Costing.
| Estimated Fixed Cost |
Estimated Variable Cost (per unit sold) |
||||||
| Production costs: | |||||||
| Direct materials | $19 | ||||||
| Direct labor | 13 | ||||||
| Factory |
$261,300 | 10 | |||||
| Selling expenses: | |||||||
| Sales salaries and commissions | 54,300 | 4 | |||||
| Advertising | 18,400 | ||||||
| Travel | 4,100 | ||||||
| Miscellaneous selling expense | 4,500 | 4 | |||||
| Administrative expenses: | |||||||
| Office and officers' salaries | 53,100 | ||||||
| Supplies | 6,500 | 2 | |||||
| Miscellaneous administrative expense | 6,040 | 2 | |||||
| Total | $408,240 | $54 |
It is expected that 8,640 units will be sold at a price of $135 a unit. Maximum sales within the relevant range are 11,000 units.
Required:
Question Content Area
1. Prepare an estimated income statement for 20Y7.
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$- Select - | ||
| Cost of goods sold: | |||
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$- Select - | ||
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- Select - | ||
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- Select - | ||
| Cost of goods sold | fill in the blank 66c57301904a001_9 | ||
| Gross profit | $fill in the blank 66c57301904a001_10 | ||
| Expenses: | |||
| Selling expenses: | |||
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$- Select - | ||
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- Select - | ||
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- Select - | ||
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- Select - | ||
| Total selling expenses | $fill in the blank 66c57301904a001_19 | ||
| Administrative expenses: | |||
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$- Select - | ||
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- Select - | ||
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- Select - | ||
| Total administrative expenses | fill in the blank 66c57301904a001_26 | ||
| Total expenses | fill in the blank 66c57301904a001_27 | ||
| Income from operations | $fill in the blank 66c57301904a001_28 |
Question Content Area
2. What is the expected contribution margin ratio? Round to the nearest whole percent.
fill in the blank e11b400b705d045_1 %
3. Determine the break-even sales in units and dollars.
| Units | fill in the blank e11b400b705d045_2 units |
| Dollars | fill in the blank e11b400b705d045_3 units |
4. Construct a cost-volume-profit chart on your own paper. What is the break-even sales?
$ fill in the blank e11b400b705d045_4
5. What is the expected margin of safety in dollars and as a percentage of sales?
| Dollars: | $fill in the blank e11b400b705d045_5 | |
| Percentage: (Round to the nearest whole percent.) | fill in the blank e11b400b705d045_6 | % |
6. Determine the operating leverage. Round to one decimal place.
fill in the blank e11b400b705d045_7
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