Cymbal E-Motors is a fast-growing start-up firm that manufactures electric motors for bicycles. The following income statement is available for April: Sales revenue (790 units @ $1,100 per unit) Less Manufacturing costs Variable costs Depreciation (fixed) Marketing and administrative costs Fixed costs (cash) Depreciation (fixed) Total costs Operating profits $ 869,000 60,400 53,000 Required: Prepare a budgeted income statement for May. Note: Do not round intermediate calculations. 124,000 61,000 $ 298,400 $ 570,600 Sales volume is expected to increase by 30 percent in May, but the sales price is expected to fall 5 percent. Variable manufacturing costs are expected to increase by 7.5 percent per unit in May. In addition to these cost changes, variable manufacturing costs also will change with sales volume. Marketing and administrative cash costs are expected to increase by 15 percent. All revenues and costs at Cymbal are cash transactions, except for depreciation. Cymbal maintains no inventories. Depreciation is fixed and is forecast to remain unchanged in the next six months. Required: Prepare a budgeted income statement for May. Note: Do not round intermediate calculations. Budgeted Income Statement For the Month of May Manufacturing costs: Cymbal E-Motors Total manufacturing costs Marketing and administrative: Total marketing and administrative costs
Cymbal E-Motors is a fast-growing start-up firm that manufactures electric motors for bicycles. The following income statement is available for April: Sales revenue (790 units @ $1,100 per unit) Less Manufacturing costs Variable costs Depreciation (fixed) Marketing and administrative costs Fixed costs (cash) Depreciation (fixed) Total costs Operating profits $ 869,000 60,400 53,000 Required: Prepare a budgeted income statement for May. Note: Do not round intermediate calculations. 124,000 61,000 $ 298,400 $ 570,600 Sales volume is expected to increase by 30 percent in May, but the sales price is expected to fall 5 percent. Variable manufacturing costs are expected to increase by 7.5 percent per unit in May. In addition to these cost changes, variable manufacturing costs also will change with sales volume. Marketing and administrative cash costs are expected to increase by 15 percent. All revenues and costs at Cymbal are cash transactions, except for depreciation. Cymbal maintains no inventories. Depreciation is fixed and is forecast to remain unchanged in the next six months. Required: Prepare a budgeted income statement for May. Note: Do not round intermediate calculations. Budgeted Income Statement For the Month of May Manufacturing costs: Cymbal E-Motors Total manufacturing costs Marketing and administrative: Total marketing and administrative costs
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Cymbal E-Motors is a fast-growing start-up firm that manufactures electric motors for bicycles. The following income statement is
available for April:
Sales revenue (790 units @ $1,100 per unit)
Less
Manufacturing costs
Variable costs
Depreciation (fixed)
Marketing and administrative costs
Fixed costs (cash)
Depreciation (fixed)
Total costs
Operating profits
$ 869,000
60,400
53,000
Required:
Prepare a budgeted income statement for May.
Note: Do not round intermediate calculations.
124,000
61,000
$ 298,400
$ 570,600
Sales volume is expected to increase by 30 percent in May, but the sales price is expected to fall 5 percent. Variable manufacturing
costs are expected to increase by 7.5 percent per unit in May. In addition to these cost changes, variable manufacturing costs also will
change with sales volume. Marketing and administrative cash costs are expected to increase by 15 percent.
All revenues and costs at Cymbal are cash transactions, except for depreciation. Cymbal maintains no inventories. Depreciation is
fixed and is forecast to remain unchanged in the next six months.
Transcribed Image Text:Required:
Prepare a budgeted income statement for May.
Note: Do not round intermediate calculations.
Budgeted Income Statement
For the Month of May
Manufacturing costs:
Cymbal E-Motors
Total manufacturing costs
Marketing and administrative:
Total marketing and administrative costs
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