I’m confused on this problem Production CostsM4 Inc. expects to maintain the same inventories at the end of 2020 as at the beginning of the year. The total ofall 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:EstimatedEstimatedVariable CostFixed Cost(per unit sold)Production costs:Direct materials$42Direct labor22Factory overhead$12,80012Selling expenses:Sales salaries and commissions8,500Advertising8,800Travel2,800Miscellaneous selling expense1,500Administrative expenses:Office and officers' salaries22,500SuppliesMiscellaneous administrative expense2,2001,740Total$60,840$91It is expected that 10,000 units will be sold at a price of $130 a unit. Maximum sales within the relevantrange are 12,000 units.Instructions1. Prepare an estimated income statement for 2020. Operating Income = $329,1602. What is the expected contribution margin ratio?3. Determine the break-even sales in units and dollars. $202,8004. What is the expected margin of safety in dollars and as a percentage of sales? 84.4%5. Determine the operating leverage.M. BakerPage 1W近

Name: I’m confused on this problem Production CostsM4 Inc. expects to mainta
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Description: I’m confused on this problem Production CostsM4 Inc. expects to maintain the same inventories at the end of 2020 as at the beginning of the year. The total ofall production costs for the year is therefore assumed to be equal to the cost of goods sold

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M4 Inc. expects to maintain the same inventories at the end of 2020 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 Fixed Cost (per unit sold) Production costs: Direct materials $42 22 Direct labor $12,800 12 Factory overhead Selling expenses: 8,500 8,800 2,800 Sales salaries and commissions Advertising Travel 1.500 411n

M4 Inc. expects to maintain the same inventories at the end of 2020 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 Fixed Cost (per unit sold) Production costs: Direct materials $42 22 Direct labor $12,800 12 Factory overhead Selling expenses: 8,500 8,800 2,800 Sales salaries and commissions Advertising Travel 1.500 411n

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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