Cymbal E-Motors is a fast-growing start-up firm that manufactures electric motors for bicycles. The following Income statement is avallable for April: Sales revenue (800 units @ $1,200 per unit) Less Manufacturing costs Variable costs Depreciation (fixed) Marketing and administrative costs Fixed costs (cash) Depreciation (fixed) Total costs Operating profits $ 960,000 60,800 54,000 124,500 62,000 $ 301,300 $ 658,700 Sales volume is expected to increase by 30 percent in May, but the sales price is expected to fall 5 percent. Varlable manufacturing costs are expected to Increase by 7.5 percent per unit in May. 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 15 percent. All revenues and costs at Cymbal are cash transactions, except for depreciation. Cymbal maintains no Inventories. Depreciation is fixed and is forecast to remain unchanged in the next six months. Required: Prepare a budgeted income statement for May. Note: Do not round intermediate calculations. Budgeted Income Statement For the Month of May Manufacturing costs: Total manufacturing costs $ $ Marketing and administrative: + Total marketing and administrative costs $
Cymbal E-Motors is a fast-growing start-up firm that manufactures electric motors for bicycles. The following Income statement is avallable for April: Sales revenue (800 units @ $1,200 per unit) Less Manufacturing costs Variable costs Depreciation (fixed) Marketing and administrative costs Fixed costs (cash) Depreciation (fixed) Total costs Operating profits $ 960,000 60,800 54,000 124,500 62,000 $ 301,300 $ 658,700 Sales volume is expected to increase by 30 percent in May, but the sales price is expected to fall 5 percent. Varlable manufacturing costs are expected to Increase by 7.5 percent per unit in May. 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 15 percent. All revenues and costs at Cymbal are cash transactions, except for depreciation. Cymbal maintains no Inventories. Depreciation is fixed and is forecast to remain unchanged in the next six months. Required: Prepare a budgeted income statement for May. Note: Do not round intermediate calculations. Budgeted Income Statement For the Month of May Manufacturing costs: Total manufacturing costs $ $ Marketing and administrative: + Total marketing and administrative costs $
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Transcribed Image Text:Cymbal E-Motors is a fast-growing start-up firm that manufactures electric motors for bicycles. The following Income statement is
avallable for April:
Sales revenue (800 units @ $1,200 per unit)
Less
Manufacturing costs
Variable costs
Depreciation (fixed)
Marketing and administrative costs
Fixed costs (cash)
Depreciation (fixed)
Total costs
Operating profits
$ 960,000
60,800
54,000
124,500
62,000
$ 301,300
$ 658,700
Sales volume is expected to increase by 30 percent in May, but the sales price is expected to fall 5 percent. Varlable manufacturing
costs are expected to Increase by 7.5 percent per unit in May. 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 15 percent.
All revenues and costs at Cymbal are cash transactions, except for depreciation. Cymbal maintains no Inventories. Depreciation is
fixed and is forecast to remain unchanged in the next six months.
Required:
Prepare a budgeted income statement for May.
Note: Do not round intermediate calculations.
Budgeted Income Statement
For the Month of May
Manufacturing costs:
Total manufacturing costs
$
$
Marketing and administrative:
+
Total marketing and administrative costs
$
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