Wolsey Industries Inc. expects to maintain the same inventories at the end of 20Y8 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 Fixed Cost Estimated Variable Cost (per unit sold)
Production costs:
Direct materials — $46.00
Direct labor — 40.00
Factory overhead $200,000.00 20.00
Selling expenses:
Sales salaries 110,000.00 8.00
Advertising 40,000.00 —
Travel 12,000.00 —
Miscellaneous expense 7,600.00 1.00
Administrative expenses: 12
Office and officers’ salaries 132,000.00 —
Supplies 10,000.00 4.00

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.
The range of activity over which changes in cost are of interest to management.

Required:
A. Prepare an estimated income statement for 20Y8. Refer to the Labels and Amount Descriptions list provided for the exact wording of the answer choices for text entries.