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

Question

The following information is available for year 1 for Dancer Components: Revenues (300,000 units). . . . . . . . . . $5,700,000 Manufacturing costs Materials 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 **Prepare a budgeted income statement for year 2.**

Explanation / Answer

http://www.unf.edu/~dtanner/4361StudyHall/test3/Chapter6/4361ch6probes_sol.htm or http://www4.ncsu.edu/~rsawyers/webpage/acc220/Chapter5.pdf

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