Cymbal E-Motors is a fast-growing start-up firm that manufactures electric motors for bicycles. The following income statement isavailable for April:Sales revenue (910 units @ $2,300 per unit)LeasManufacturing costsVariable costsDepreciation (fixed)Marketing and administrative costsFixed costs (cash)Depreciation (fixed)Total costsOperating profitsRequired:Prepare a budgeted income statement for MayNote: Do not round intermediate calculations.Sales volume is expected to increase by 30 percent in May, but the sales price is expected to fall 5 percent. Variablemanufacturing costs are expected to increase by 7.5 percent per unit in May. In addition to these cost changes, variablemanufacturing costs also will change with sales volume. Marketing and administrative cash costs are expected to increase by 15percent.Cymbal E-MotorsBudgeted Income StatementFor the Month of MayAll revenues and costs at Cymbal are cash transactions, except for depreciation. Cymbal maintains no inventories. Depreciationis fixed and is forecast to remain unchanged in the next six months.Manufacturing costs:Total manufacturing costs$ 2,093,000Marketing and administrative:65,20065,000Total marketing and administrative costs130,00073,000$333,200$ 1,759,800

The budgeted Income Statement is the Estimated Income Statement of the Company for the Future…

Cymbal E-Motors is a fast-growing start-up firm that manufactures electric motors for bicycles. The following income statement available for April: Sales revenue (910 units @ $2,300 per unit) Leas Manufacturing costs Variable costs Depreciation (fixed) Marketing and administrative costs Fixed costs (cash) Depreciation (fixed) Total costs Operating profits $ 2,093,000 65,200 65,000 130,000 73,000 $333,200 $ 1,759,800

Cymbal E-Motors is a fast-growing start-up firm that manufactures electric motors for bicycles. The following income statement available for April: Sales revenue (910 units @ $2,300 per unit) Leas Manufacturing costs Variable costs Depreciation (fixed) Marketing and administrative costs Fixed costs (cash) Depreciation (fixed) Total costs Operating profits $ 2,093,000 65,200 65,000 130,000 73,000 $333,200 $ 1,759,800

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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