Cycle-1 is a fast-growing start-up firm that manufactures bicycles. The following income statement is available for October. Sales revenue (510 units@ $680 per unit) Less Manufacturing costs Variable costs Depreciation (fixed) Marketing and administrative costs Fixed costs (cash) Depreciation (fixed) Total costs Operating profits $346,800 25,000 27,500 65,700 22,800 $141,000 $205,800 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 2 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 h 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 (510 units@ $680 per unit) Less Manufacturing costs Variable costs Depreciation (fixed) Marketing and administrative costs Fixed costs (cash) Depreciation (fixed) Total costs Operating profits $346,800 25,000 27,500 65,700 22,800 $141,000 $205,800 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 2 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 h 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.)

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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