Prepare budgeted financial statement Gulf states manufacturing has the following data from year 1 operation, which are to be used for developing year 2 budget estimates.
Sales Revenue(37,500) $ 2,500,000
Manufacturing costs Material $ 400,000
Variable Cash costs 545,000
Fixed Cash Costs 216,000
Depreciation (fixed) 267,000
Marketeting and Admin costs
Marketing (variable cost) 285,000
Marketing Depreccation 67,800
Administration (fixed, cash) 270,300
Administration Depreciation 25,200
Total Costs $ 2076,300
Operating Profits $ 423,700
Additional information
- Annual Depreciation on old manufacturing equipment $ 29,100
- Annual Depreciation on new equipment acquired in year 2 $ 42,000
Year 2 expectation
- % increase in sales volume 8%
- % increase in prices 3%
- % increase in material cost per unit 6%
- % decrease in other unit variable manuf. cost per unit 5%
- % decrease in fixed cash manufacturing costs 9%
- % increase in administrative cash costs 10%
Required:
Prepare a budgeted income Statement for year 2