Coyle Manufacturing reports the following information for year 1: Sales revenue (50,000 units) Manufacturing costs Materials Variable cash costs Fixed cash costs Depreciation (fixed) Marketing and administrative costs Marketing (variable, cash) Marketing depreciation Administrative (fixed, cash) Administrative depreciation Total costs Operating profits (losses) $ 5,130,000 $ 302,000 256,000 590,000 1,800,000 760,000 269,000 916,000 134,000 $ 5,027,000 $ 103,000 All depreciation charges are fixed. Manufacturing depreciation is expected to increase by 10 percent in year 2. Marketing and administrative depreciation are expected to remain the same for year 2. Sales volume is expected to increase by 5 percent, but prices are expected to fall by 10 percent. Materials costs per unit are expected to decrease by 8 percent. Unit variable cash manufacturing costs are expected to increase by 15 percent. Fixed cash costs are expected to increase by 6 percent. Variable marketing costs will change with unit volume. Administrative cash costs are expected to decrease by 10 percent. Inventories are kept at zero. Coyle Manufacturing operates on a cash basis. Required: Prepare a budgeted income statement for year 2 for Coyle Manufacturing. Note: Do not round intermediate calculations.
Coyle Manufacturing reports the following information for year 1: Sales revenue (50,000 units) Manufacturing costs Materials Variable cash costs Fixed cash costs Depreciation (fixed) Marketing and administrative costs Marketing (variable, cash) Marketing depreciation Administrative (fixed, cash) Administrative depreciation Total costs Operating profits (losses) $ 5,130,000 $ 302,000 256,000 590,000 1,800,000 760,000 269,000 916,000 134,000 $ 5,027,000 $ 103,000 All depreciation charges are fixed. Manufacturing depreciation is expected to increase by 10 percent in year 2. Marketing and administrative depreciation are expected to remain the same for year 2. Sales volume is expected to increase by 5 percent, but prices are expected to fall by 10 percent. Materials costs per unit are expected to decrease by 8 percent. Unit variable cash manufacturing costs are expected to increase by 15 percent. Fixed cash costs are expected to increase by 6 percent. Variable marketing costs will change with unit volume. Administrative cash costs are expected to decrease by 10 percent. Inventories are kept at zero. Coyle Manufacturing operates on a cash basis. Required: Prepare a budgeted income statement for year 2 for Coyle Manufacturing. Note: Do not round intermediate calculations.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Coyle Manufacturing reports the following information for year 1:
Sales revenue (50,000 units)
Manufacturing costs
Materials
Variable cash costs
Fixed cash costs
Depreciation (fixed)
Marketing and administrative costs
Marketing (variable, cash)
Marketing depreciation
Administrative (fixed, cash)
Administrative depreciation
Total costs
Operating profits (losses)
$ 5,130,000
$ 302,000
256,000
590,000
1,800,000
760,000
269,000
916,000
134,000
$ 5,027,000
$ 103,000
All depreciation charges are fixed. Manufacturing depreciation is expected to increase by 10 percent in year 2. Marketing and
administrative depreciation are expected to remain the same for year 2. Sales volume is expected to increase by 5 percent, but
prices are expected to fall by 10 percent. Materials costs per unit are expected to decrease by 8 percent. Unit variable cash
manufacturing costs are expected to increase by 15 percent. Fixed cash costs are expected to increase by 6 percent.
Variable marketing costs will change with unit volume. Administrative cash costs are expected to decrease by 10 percent.
Inventories are kept at zero. Coyle Manufacturing operates on a cash basis.
Required:
Prepare a budgeted income statement for year 2 for Coyle Manufacturing.
Note: Do not round intermediate calculations.
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