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13-36 The following information is available for year 1 for Dancer Components:

Price: $2.50


The following information is available for year 1 for Dancer Components:


Revenues (300,000 units)  5,700,000
Manufacturing costs 
Materials                        336,000
Variable cash costs                284,800
Fixed cash costs                  655,200
 Depreciation (fixed)                1,998,000
Marketing and administrative costs 
Marketing (variable, cash)           844,800
Marketing depreciation             299,200
Administrative (fixed, cash)          1,018,400
Administrative depreciation  149,600
Total costs  5,586,000
Operating profits                    114,000

All depreciation charges are fixed and are expected to remain the same for year 2. Sales volume is
expected to increase by 18 percent, but prices are expected to fall by 5 percent. Material costs per
unit are expected to decrease by 8 percent. Other unit variable manufacturing costs are expected to
decrease by 2 percent per unit. Fixed manufacturing costs are expected to increase by 5 percent.

Variable marketing costs will change with volume. Administrative cash costs are expected to
increase by 10 percent. Inventories are kept at zero. Dancer operates on a cash basis.

Required
Prepare a budgeted income statement for year 2.

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