Janniel Inc. is preparing its budget for 2016. Income statement for 2015 is presented below: Sales (100,000 units) P1,000,00 Cost of sales 600,000 P400,000 | 240,000 Operating expenses Operating Income/ P160,000 Operating expenses includes depreciation of P40,000. For the year 2016, the company plans to increase selling price by 10% which is expected to decrease sales volume in units by 5%. The cost of sales as a percent of sales will increase to 62%. Other than depreciation, all operating costs are variable. Required: What is the budgeted income for 2016? TVERSITY OLINE

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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PROBLEM 7-E BUDGETED OPERATING INCOME
Janniel Inc. is preparing
pudget for 2016. Income statement for 2015 is presented
below:
Sales (100,000 units)
P1,000,00
Cost of sales
600,000
P400,000
240,000
P160,000
Operating Income
Operating expenses includes depreciation of P40,000. For the year 2016, the company plans to
increase selling price by 10% which is expected to decrease sales volume in units by 5%. The
cost of sales as a percent of sales will increase to 62%. Other than depreciation, all operating
costs are variable.
Required:
What is the budgeted income for 2016?
1011
NIVERSITY
SAPIENTIA
EDIFICAT
Transcribed Image Text:PROBLEM 7-E BUDGETED OPERATING INCOME Janniel Inc. is preparing pudget for 2016. Income statement for 2015 is presented below: Sales (100,000 units) P1,000,00 Cost of sales 600,000 P400,000 240,000 P160,000 Operating Income Operating expenses includes depreciation of P40,000. For the year 2016, the company plans to increase selling price by 10% which is expected to decrease sales volume in units by 5%. The cost of sales as a percent of sales will increase to 62%. Other than depreciation, all operating costs are variable. Required: What is the budgeted income for 2016? 1011 NIVERSITY SAPIENTIA EDIFICAT
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