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Coyle Manufacturing reports the following information for year 1: Sales revenue (60,000 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) Coyle Manufacturing Budgeted Income Statement For Year 2 Sales revenue Manufacturing costs: Materials Variable cash costs Fixed cash costs Depreciation (fixed) 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 inc ase by 5 percent, but prices are expected to fall by 10 percent. Mat ials costs per unit are expected to decreas 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. Total manufacturing costs Marketing and administrative costs: 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. Marketing (variable, cash) Marketing depreciation Administrative (fixed, cash) Required: Prepare a budgeted income statement for year 2 for Coyle Manufacturing. Note: Do not round intermediate calculations. Total marketing and administrative costs Total costs Operating loss 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 0 0 0

Coyle Manufacturing reports the following information for year 1: Sales revenue (60,000 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) Coyle Manufacturing Budgeted Income Statement For Year 2 Sales revenue Manufacturing costs: Materials Variable cash costs Fixed cash costs Depreciation (fixed) 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 inc ase by 5 percent, but prices are expected to fall by 10 percent. Mat ials costs per unit are expected to decreas 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. Total manufacturing costs Marketing and administrative costs: 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. Marketing (variable, cash) Marketing depreciation Administrative (fixed, cash) Required: Prepare a budgeted income statement for year 2 for Coyle Manufacturing. Note: Do not round intermediate calculations. Total marketing and administrative costs Total costs Operating loss 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 0 0 0

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Coyle Manufacturing reports the following information for year 1: Sales revenue (60,000 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) Coyle Manufacturing Budgeted Income Statement For Year 2 Sales revenue Manufacturing costs: Materials Variable cash costs Fixed cash costs Depreciation (fixed) 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. Total manufacturing costs Marketing and administrative costs: 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. Marketing (variable, cash) Marketing depreciation Administrative (fixed, cash) Required: Prepare a budgeted income statement for year 2 for Coyle Manufacturing. Note: Do not round intermediate calculations. Total marketing and administrative costs Total costs Operating loss 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 $ 0 0 0
Transcribed Image Text:Coyle Manufacturing reports the following information for year 1: Sales revenue (60,000 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) Coyle Manufacturing Budgeted Income Statement For Year 2 Sales revenue Manufacturing costs: Materials Variable cash costs Fixed cash costs Depreciation (fixed) 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. Total manufacturing costs Marketing and administrative costs: 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. Marketing (variable, cash) Marketing depreciation Administrative (fixed, cash) Required: Prepare a budgeted income statement for year 2 for Coyle Manufacturing. Note: Do not round intermediate calculations. Total marketing and administrative costs Total costs Operating loss 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 $ 0 0 0
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