(b) Prepare the budgeted multiple-step income statement for 2022. (Ignore income taxes.) SHERIDAN COMPANY Budgeted Income Statement For the Year Ending December 31, 2022 Sales Cost of Goods Sold Gross Profit Selling and Administrative Expenses Net Income/(Loss) $
(b) Prepare the budgeted multiple-step income statement for 2022. (Ignore income taxes.) SHERIDAN COMPANY Budgeted Income Statement For the Year Ending December 31, 2022 Sales Cost of Goods Sold Gross Profit Selling and Administrative Expenses Net Income/(Loss) $
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Master Budget
A master budget can be defined as an estimation of the revenue earned or expenses incurred over a specified period of time in the future and it is generally prepared on a periodic basis which can be either monthly, quarterly, half-yearly, or annually. It helps a business, an organization, or even an individual to manage the money effectively. A budget also helps in monitoring the performance of the people in the organization and helps in better decision-making.
Sales Budget and Selling
A budget is a financial plan designed by an undertaking for a definite period in future which acts as a major contributor towards enhancing the financial success of the business undertaking. The budget generally takes into account both current and future income and expenses.
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Transcribed Image Text:Sheridan Company is preparing its budgeted income statement for 2022. Relevant data pertaining to its sales, production, and direct
materials budgets are as follows.
Sales. Sales for the year are expected to total 880,000 units. Quarterly sales are 20%, 27%, 26%, and 27%, respectively. The unit
selling price is expected to be $41 for the first three quarters and $43 beginning in the fourth quarter. Sales in the first quarter of 2023
are expected to be 10% higher than the budgeted sales for the first quarter of 2022.
Production Management desires to maintain the ending finished goods inventories at 25% of the next quarter's budgeted sales
volume.
Direct materials. Each unit requires 2 pounds of raw materials at a cost of $12 per pound. Management desires to maintain raw
materials inventories at 10% of the next quarter's production requirements. Assume the production requirements for first quarter of
2023 are 396,000 pounds.
Sheridan budgets 0.4 hours of direct labor per unit, labor costs at $11 per hour, and manufacturing overhead at $17 per direct labor
hour. Its budgeted selling and administrative expenses for 2022 are $5,280,000.
Transcribed Image Text:(b)
Prepare the budgeted multiple-step income statement for 2022. (Ignore income taxes.)
SHERIDAN COMPANY
Budgeted Income Statement
For the Year Ending December 31, 2022
Sales
Cost of Goods Sold
Gross Profit
Selling and Administrative Expenses
Net Income/(Loss)
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