Budgeted income statement Last year's income statement for Cooper Company is as follows: Sales Cost of goods sold Direct material Direct labor Overhead Gross profit Expenses Selling Administrative Income before taxes Sales Cost of goods sold Direct material Direct labor Overhead Gross profit Expenses Selling $880,000 440,000 220,000 1,540,000 $660,000 $228,800 264,000 This year, unit sales of 220,000 are expected to increase by 25 percent; material and labor costs are expected to increase by 10 percent per unit. Overhead is applied to production based on a percentage of direct labor costs. Fixed selling expenses total $52,800; the remainder varies with sales dollars. All administrative costs are fixed. Management desires to earn 10 percent on sales this year and will adjust the unit selling price if necessary. Develop a budgeted income statement for the year for Cooper Company that incorporates the indicated. changes. Note: Do not use negative signs with your answers. Note: After calculating your selling price per unit, round your answer to two decimal places and use this rounded amount to calculate sales in total. $ $ $ $2,200,000 $ Administrative Income before taxes $ 492,800 $167,200 0 0 0 0 0 0 0 0

Budgeted income statement Last year's income statement for Cooper Company is as follows: Sales Cost of goods sold Direct material Direct labor Overhead Gross profit Expenses Selling Administrative Income before taxes Sales Cost of goods sold Direct material Direct labor Overhead Gross profit Expenses Selling $880,000 440,000 220,000 1,540,000 $660,000 $228,800 264,000 This year, unit sales of 220,000 are expected to increase by 25 percent; material and labor costs are expected to increase by 10 percent per unit. Overhead is applied to production based on a percentage of direct labor costs. Fixed selling expenses total $52,800; the remainder varies with sales dollars. All administrative costs are fixed. Management desires to earn 10 percent on sales this year and will adjust the unit selling price if necessary. Develop a budgeted income statement for the year for Cooper Company that incorporates the indicated. changes. Note: Do not use negative signs with your answers. Note: After calculating your selling price per unit, round your answer to two decimal places and use this rounded amount to calculate sales in total. $ $ $ $2,200,000 $ Administrative Income before taxes $ 492,800 $167,200 0 0 0 0 0 0 0 0

Financial And Managerial Accounting

15th Edition

ISBN:9781337902663

Author:WARREN, Carl S.

Publisher:WARREN, Carl S.

Chapter22: Budgeting

Section: Chapter Questions

Problem 3PB: Budgeted income statement and supporting budgets The budget director of Gold Medal Athletic Co.,...

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