13-34. Prepare Budgeted FinancialStatements Cameron Parts has the following data

Question

13-34. Prepare Budgeted FinancialStatements Cameron Parts has the following datafrom year 1 operations, which are to be used for developingyear 2 budget estimates: Revenues (25,000units)   $373,000 Manufacturing costs     Materials 66,500      Variable cashcosts   90,450      Fixed cashcosts 36,000      Depreciation(?xed)    44,500 Marketing and administrativecosts      Marketing(variable, cash)   47,500      Marketingdepreciation 11,300      Administrative(fixed, cash) 45,055      Administrativedepreciation 4,200           TotalCosts $345,505 Operating Profits $27,495 All depreciation charges are ?xed. Oldmanufacturing equipment with an annual depreciation charge of $4,850 will be replaced inyear 2 with new equipment that will incur an annualdepreci- ation charge of $7,000. Sales volumeand prices are expected to increase by 12 percent and 6percent, respectively. On a per unit basis,expectations are that materials costs will increase by 10 percentand variable manufacturing costs willdecrease by 4 percent. Fixed manufacturing costs are expectedto decrease by 7 percent.   Variable marketing costs will changewith volume. Administrative cash costs are expected to increase by 8 percent. Inventories arekept at zero. Cameron operates on a cash basis. Required Prepare a budgeted income statement foryear 2. 13-34. Prepare Budgeted FinancialStatements Cameron Parts has the following datafrom year 1 operations, which are to be used for developingyear 2 budget estimates: Revenues (25,000units)   $373,000 Manufacturing costs     Materials 66,500      Variable cashcosts   90,450      Fixed cashcosts 36,000      Depreciation(?xed)    44,500 Marketing and administrativecosts      Marketing(variable, cash)   47,500      Marketingdepreciation 11,300      Administrative(fixed, cash) 45,055      Administrativedepreciation 4,200           TotalCosts $345,505 Operating Profits $27,495 All depreciation charges are ?xed. Oldmanufacturing equipment with an annual depreciation charge of $4,850 will be replaced inyear 2 with new equipment that will incur an annualdepreci- ation charge of $7,000. Sales volumeand prices are expected to increase by 12 percent and 6percent, respectively. On a per unit basis,expectations are that materials costs will increase by 10 percentand variable manufacturing costs willdecrease by 4 percent. Fixed manufacturing costs are expectedto decrease by 7 percent.   Variable marketing costs will changewith volume. Administrative cash costs are expected to increase by 8 percent. Inventories arekept at zero. Cameron operates on a cash basis. Required Prepare a budgeted income statement foryear 2.

Explanation / Answer

x.P5order="0" cellspacing="0" cellpadding="0" width="701"> 13-34. Prepare Budgeted Financial Statements Cameron Parts has the following data from year 1 operations, which are to be used for developing year 2 budget estimates: Year One Year Two Revenues (25,000 units)   $373,000 $442,960 Manufacturing costs      Materials 66,500 73,150 73,150      Variable cash costs   90,450 105,280 105,280      Fixed cash costs 36,000 33,480 33,480      Depreciation (?xed)    44,500 49,650 49,650 Marketing and administrative costs 261,560      Marketing (variable, cash)   47,500 53,200      Marketing depreciation 11,300 11,300 53,200      Administrative (fixed, cash) 45,055 48,659 11,300      Administrative depreciation 4,200 4,200 48,659           Total Costs $345,505 $378,919 4,200 Operating Profits $27,495 $64,041 117,359 All depreciation charges are ?xed. Old manufacturing equipment with an annual depreciation charge of $4,850 will be replaced in year 2 with new equipment that will incur an annual depreci- ation charge of $7,000. Sales volume and prices are expected to increase by 12 percent and 6 percent, respectively. On a per unit basis, expectati

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