Cycle-1 is a fast-growing start-up firm that manufactures bicycles. The following income statement is available for October: Sales revenue (530 units @ $790 per unit) $ 418,700 Less Manufacturing costs Variable costs 26,000 Depreciation (fixed) 26,200 Marketing and administrative costs Fixed costs (cash) 65,900 Depreciation (fixed) 22,800 Total costs $ 140,900 Operating profits $ 277,800 Sales volume is expected to increase by 20 percent in November, but the sales price is expected to fall 5 percent. Variable manufacturing costs are expected to increase by 3 percent per unit in November. In addition to these cost changes, variable manufacturing costs also will change with sales volume. Marketing and administrative cash costs are expected to increase by 10 percent. Cycle-1 operates on a cash basis and maintains no inventories. Depreciation is fixed and should remain unchanged over the next three years. Required: Prepare a budgeted income statement for November. (Do not round intermediate calculations.)
Cycle-1 is a fast-growing start-up firm that manufactures bicycles. The following income statement is available for October: Sales revenue (530 units @ $790 per unit) $ 418,700 Less Manufacturing costs Variable costs 26,000 Depreciation (fixed) 26,200 Marketing and administrative costs Fixed costs (cash) 65,900 Depreciation (fixed) 22,800 Total costs $ 140,900 Operating profits $ 277,800 Sales volume is expected to increase by 20 percent in November, but the sales price is expected to fall 5 percent. Variable manufacturing costs are expected to increase by 3 percent per unit in November. In addition to these cost changes, variable manufacturing costs also will change with sales volume. Marketing and administrative cash costs are expected to increase by 10 percent. Cycle-1 operates on a cash basis and maintains no inventories. Depreciation is fixed and should remain unchanged over the next three years. Required: Prepare a budgeted income statement for November. (Do not round intermediate calculations.)
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Cycle-1 is a fast-growing start-up firm that manufactures bicycles. The following income statement is available for October:
| Sales revenue (530 units @ $790 per unit) | $ | 418,700 |
| Less | ||
| Variable costs | 26,000 | |
| 26,200 | ||
| Marketing and administrative costs | ||
| Fixed costs (cash) | 65,900 | |
| Depreciation (fixed) | 22,800 | |
| Total costs | $ | 140,900 |
| Operating profits | $ | 277,800 |
Sales volume is expected to increase by 20 percent in November, but the sales price is expected to fall 5 percent. Variable manufacturing costs are expected to increase by 3 percent per unit in November. In addition to these cost changes, variable manufacturing costs also will change with sales volume. Marketing and administrative cash costs are expected to increase by 10 percent.
Cycle-1 operates on a cash basis and maintains no inventories. Depreciation is fixed and should remain unchanged over the next three years.
Required:
Prepare a
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