Baskin Promotions, Incorporated sells T-shirts decorated for a variety of concert performers. The company has developed the following budget for the coming year based on a sales forecast of 80,000 T-shirts: Sales Cost of Goods Sold Gross Profit Operating Expenses ($100,000 is fixed) Operating Income Income Taxes (30% of operating income) Net Income $1,400,000 820,000 580,000 418,400 161,600 48,480 $ 113,120 Cost of goods sold and variable operating expenses vary directly with sales, and the income tax rate is 30% at all levels of operating income. If the concert season is slow due to poor weather, Baskin estimates that sales could fall to as low as 60,000 T-shirts. What unit cost did Baskin use in budgeting the cost of goods sold for the year?

Baskin Promotions, Incorporated sells T-shirts decorated for a variety of concert performers. The company has developed the following budget for the coming year based on a sales forecast of 80,000 T-shirts: Sales Cost of Goods Sold Gross Profit Operating Expenses ($100,000 is fixed) Operating Income Income Taxes (30% of operating income) Net Income $1,400,000 820,000 580,000 418,400 161,600 48,480 $ 113,120 Cost of goods sold and variable operating expenses vary directly with sales, and the income tax rate is 30% at all levels of operating income. If the concert season is slow due to poor weather, Baskin estimates that sales could fall to as low as 60,000 T-shirts. What unit cost did Baskin use in budgeting the cost of goods sold for the year?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

Evergreen Corporation manufactures circuit boards and is in the process of preparing next year's budget. The pro forma income statement for the current year is presented below. Sales $ 3,500,000Cost of sales: Direct Material $ 500,000 Direct labor 250,000 Variable Overhead 275,000 Fixed Overhead 600,000 1,625,000Gross Profit $ 1,875,000Selling and General & Admin. Exp. Variable 750,000 Fixed 250,000 1,000,000Operating Income $ 875,000The break-even point (rounded to the nearest dollar) for Evergreen Corporation for the current year is:$2,155,172.$1,865,672.$1,724,138.$2,625,000.
Sarafiny Corporation is in the process of preparing its annual budget. The following beginning and ending inventory levels are planned for the year. Finished goods (units) Raw material (grams) Each unit of finished goods requires 3 grams of raw material. The company plans to sell 630,000 units during the year. Multiple Choice The number of units the company would have to manufacture during the year would be: O O O 630,000 units 708,000 units Beginning Inventory 28,000 58,000 572,000 units Ending Inventory 78,000 48,000 680,000 units
Required information Skip to question [The following information applies to the questions displayed below.] Baskin Promotions, Inc. sells T-shirts decorated for a variety of concert performers. The company has developed the following budget for the coming year based on a sales forecast of 90,000 T-shirts: Sales $ 1,584,000 Cost of Goods Sold 931,500 Gross Profit 652,500 Operating Expenses ($100,000 is fixed) 458,200 Operating Income 194,300 Income Taxes (30% of operating income) 58,290 Net Income $ 136,010 Cost of goods sold and variable operating expenses vary directly with sales, and the income tax rate is 30% at all levels of operating income. If the concert season is slow due to poor weather, Baskin estimates that sales could fall to as low as 70,000 T-shirts. What unit cost did Baskin use in budgeting the cost of goods sold for the year? Multiple Choice $6.14 per unit $10.35 per unit $17.60…
Gardner Corporation manufactures skateboards and is in the process of preparing next year's budget. The pro forma income statement for the current year is presented below. Sales $ 1,500,000 Cost of sales: Direct Material $ 250,000 Direct labor 150,000 Variable Overhead 75,000 Fixed Overhead 100,000 575,000 Gross Profit $ 925,000 Selling and G&A Variable 200,000 Fixed 250,000 450,000 Operating Income $ 475,000 The break-even point (rounded to the nearest dollar) for Gardner Corporation for the current year is:
Coronado Sports sells volleyball kits that it purchases from a sports equipment distributor. The following static budget based on sales of 2,500 kits was prepared for the year. Fixed operating expenses account for 65% of total operating expenses at this level of sales. Sales $ 275,000 Cost of goods sold (all variable) 268,800 Gross margin 6,200 Operating expenses 28,350 Operating income $ - 22,150 Assume that during the year Coronado Sports actually sold 2,700 volleyball kits during the year at a price of $ 113 per kit. Calculate the sales price variance. (If variance is zero, select "Not Applicable" and enter O for the amounts.) $ Sales price variance %24
Sunland Sports sells volleyball kits that it purchases from a sports equipment distributor. The following static budget based on sales of 2,500 kits was prepared for the year. Fixed operating expenses account for 75% of total operating expenses at this level of sales. Sales Revenue $ 230,000 Cost of goods sold (all variable) 170,000 Gross margin 60,000 Operating expenses 50,000 Operating income 2$ 10,000 Prepare a flexible budget based on sales of 1,000, 2,820, and 3,760 units. (Round unit values to 2 decimal places e.g. 15.25 and all other answers to 0 decimal places, eg. 1525. If operating income is negative, enter amounts using a negative sign preceding the number e.g. -45 or parentheses e.g. (45).)
Fazel Company makes and sells paper products. In the coming year, Fazel expects total sales of $18,000,000. There is a 6% commission on sales. In addition, fixed expenses of the sales and administrative offices include the following: Salaries $ 960,000 Utilities 365,000 Office space 230,000 Advertising 1,200,000 Required: Prepare a selling and administrative expenses budget for Fazel Company for the coming year. Fazel Company Selling and Administrative Expenses Budget For the Coming Year Variable selling expenses Fixed expenses: Salaries Utilities Office space Advertising Total fixed expenses Total selling and administrative expenses
Top executive officers of Rundle Company, a merchandising firm, are preparing the next year's budget. The controller has provide everyone with the current year's projected income statement. Sales revenue Cost of goods sold Gross profit Selling & administrative expenses Net income Current Year $ 1,998,800 1,425,000 475,000 266,000 $ 209,000 Cost of goods sold is usually 75 percent of sales revenue, and selling and administrative expenses are usually 10 percent of sales a fixed cost of $76,000. The president has announced that the company's goal is to increase net income by 10 percent. Required The following items are independent of each other: a. Prepare a pro forma income statement. What percentage increase in sales would enable the company to reach its goal? b. The market may become stagnant next year, and the company does not expect an increase in sales revenue. The production manager believes that an improved production procedure can cut cost of goods sold by 1 percent. Prepare a…
Baskin Promotions, Incorporated sells T-shirts decorated for a variety of concert performers. The company has developed the following budget for the coming year based on a sales forecast of 80,000 T-shirts: Sales Cost of Goods Sold Gross Profit Operating Expenses ($100,000 is fixed) Operating Income Income Taxes (30% of operating income) Net Income $ 1,400,000 820,000 580,000 418,400 161,600 48,480 $ 113, 120 Cost of goods sold and variable operating expenses vary directly with sales, and the income tax rate is 30% at all levels of operating income. If the concert season is slow due to poor weather, Baskin estimates that sales could fall to as low as 60,000 T-shirts. Assume Baskin actually achieves the 60,000 unit sales level, and that net income actually earned at this level was $70,000. A performance report would indicate that net income was:
Coronado Sports sells volleyball kits that it purchases from a sports equipment distributor. The following static budget based on sales of 2,000 kits was prepared for the year. Fixed operating expenses account for 80% of total operating expenses at this level of sales. Sales Revenue $ 100,220 Cost of goods sold (all variable) 60,400 Gross margin 39,820 Operating expenses 35,080 Operating income $ 4,740 Prepare a flexible budget based on sales of 1,464, 2,700, and 3,910 units. (Round unit values to 2 decimal places e.g. 15.25 and all other answers to 0 decimal places, e.g. 1525. If operating income is negative, enter amounts using a negative sign preceding the number e.g. -45 or parentheses e.g. (45).)
Martin Footwear produces high quality computer bags. The accountant has prepared the following budget information for 2019: Fixed costs (total) Manufacturing $2,500,000 Marketing and selling 250,000 Administrative 750,000 Total fixed costs $3,750,000 Other information Sales in dollars (total) $7,500,000 Selling price per unit $150 Variable manufacturing costs per unit $60 Variable selling costs per unit $10 Income tax rate 40% Required What is the break-even point for 2019 in units and in sales dollars? ( ignore income taxes) What is the projected net income before tax for 2019? How many computer bags will need to be sold to achieve a target profit, after taxes, of $3,000,000?
Top executive officers of Tildon Company, a merchandising firm, are preparing the next year’s budget. The controller has provided everyone with the current year’s projected income statement. Current Year Sales revenue $ 1,600,000 Cost of goods sold 1,120,000 Gross profit 480,000 Selling & administrative expenses 190,000 Net income $ 290,000 Cost of goods sold is usually 70 percent of sales revenue, and selling and administrative expenses are usually 10 percent of sales plus a fixed cost of $30,000. The president has announced that the company’s goal is to increase net income by 15 percent. Required The following items are independent of each other: Prepare a pro forma income statement. What percentage increase in sales would enable the company to reach its goal? The market may become stagnant next year, and the company does not expect an increase in sales revenue. The production manager believes that an improved production…