Brooks company is considering the addition of a new product to its cosmetics line. The company has three distinctly different options: a skin cream, a bath oil, or a hair coloring gel. Relevant information and budgeted annual income statements for each of the products sold.
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.
This is complete 1 question
please answer within the format by providing formula the detailed working
Please provide answer in text (Without image)
Please provide answer in text (Without image)
Please provide answer in text (Without image)
Brooks company is considering the addition of a new product to its cosmetics line. The company has three distinctly different options: a skin cream, a bath oil, or a hair coloring gel. Relevant information and
Relevant Information
Skin Cream Bath Oil Color Gel
Budgeted sales in units (a) 134,000 214,000 94,000
Expected sales in price (b) $ 8 $ 6 $ 14
Variable costs per unit (c) $ 2 $ 4 $ 10
Income statements
Sales revenue (a * b) $1,072,000 $1,284,000 $1,316,000
Variable costs (a * c) (268,000) (856,000) (940,000)
Contribution margin 804,000 428,000 376,000
Fixed costs (648,000) (360,000) (124,000)
Net Income $ 156,000 $ 68,000 $ 252,000
Required
Determine the margin of safety as a percentage for each product.
Skin Cream Bath Oil Color Gel
Margin of safety % % %
Prepare revised income statements for each product, assuming a 20 percent increase in the budgeted sales volume.
BROOKS COMPANY
Income Statements
Skin Cream Bath Oil Color Gel
Sales revenue $1,286,400 $1,540,800 $1,579,200
Variable costs
Contribution margin $1,286,400 $1,540,800 $1,579,200
Fixed cost (648,000) (360,000) (124,000)
Net income
For each product, determine the percentage change in net income that results from a 20 percent increase in sales.
Skin Cream Bath Oil Color Gel
Percentage change in net income % % %
Step by step
Solved in 4 steps
