Question

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Explanation:

Calculate estimated sales revenue

Using the Variable Cost knowledge point

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Calculate cost of goods sold components

Using the Variable Cost and Fixed Cost knowledge points

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Calculate gross profit

Using the Variable Cost and Fixed Cost knowledge points

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Calculate selling expenses

Using the Variable Cost and Fixed Cost knowledge points

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Answer:

Line Item Description	Amount	Amount	Amount
Cost of goods sold:
    Direct materials		\$700,000
    Direct labor		\$437,500
    Factory overhead		\$665,000
Total cost of goods sold			\$1,802,500
Gross profit			\$1,697,500
Expenses:
    Selling expenses:
        Sales salaries and commissions	\$285,000
        Advertising	\$125,000
        Travel	\$60,000
        Miscellaneous selling expense	\$97,500