Question: The following information is available for 2019 for Dragon Products:
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Revenue (100,000 units)
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$900,000
|
|
Manufacturing costs:
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Materials
|
60,000
|
|
Variable overhead cash costs
|
50,000
|
|
Fixed overhead cash costs
|
100,000
|
|
Depreciation
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250,000
|
|
Marketing and administrative costs:
|
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Variable marketing cash costs
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100,000
|
|
Marketing depreciation
|
50,000
|
|
Administrative cash costs
|
130,000
|
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Administrative depreciation
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20,000
|
|
Total costs
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$760,000
|
|
Operating income
|
$140,000
|
All depreciation charges are expected to remain the same for 2020. Sales volume is expected to increase by 30 percent, but prices are expected to fall by 5 percent. Material costs are expected to decrease by 5 percent. Variable manufacturing overhead cash costs are expected to decrease by 3 percent. Fixed manufacturing overhead cash costs are expected to increase by 5 percent.
Variable marketing cash costs change with volume. Administrative cash costs are expected to increase by 10 percent. Inventories are kept at zero.
Required: Prepare Budgeted income statement for 2020. Round budget line items to the nearest dollar.
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