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Prepare a complete projected income statement in the contribution format for each scenario, in the manner of a flexible budget. Please show work Carolina Manufacturing Company has been operating at a loss for several years. A management team has assembled to determine what course of action to take next year to reach profitability. They begin by reviewing the most recent income statement (below). Carolina Manufacturing Company Income Statement For the Year Ended December 31 Sales (45,000 units at $15) Less cost of goods sold: Net loss Direct materials Direct labor Manufacturing overhe Gross margin Less operating expenses Selling expenses Variable Sales commissions Shipping 135,000 117,450 147,750 Fixed (advertising, salaries) Administrative expenses Variable (billing and other) Fixed (salaries and other) $675,000 2,700 72,000 400,200 274,800 40,500 8,100 180,000 228,600 74,700 ($28,500)

Prepare a complete projected income statement in the contribution format for each scenario, in the manner of a flexible budget. Please show work Carolina Manufacturing Company has been operating at a loss for several years. A management team has assembled to determine what course of action to take next year to reach profitability. They begin by reviewing the most recent income statement (below). Carolina Manufacturing Company Income Statement For the Year Ended December 31 Sales (45,000 units at $15) Less cost of goods sold: Net loss Direct materials Direct labor Manufacturing overhe Gross margin Less operating expenses Selling expenses Variable Sales commissions Shipping 135,000 117,450 147,750 Fixed (advertising, salaries) Administrative expenses Variable (billing and other) Fixed (salaries and other) $675,000 2,700 72,000 400,200 274,800 40,500 8,100 180,000 228,600 74,700 ($28,500)

FINANCIAL ACCOUNTING
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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Prepare a complete projected income statement in the contribution format for each scenario, in the manner of a flexible budget. Please show work Carolina Manufacturing Company has been operating at a loss for several years. A management team has assembled to determine what course of action to take next year to reach profitability. They begin by reviewing the most recent income statement (below). Carolina Manufacturing Company Income Statement For the Year Ended December 31 Sales (45,000 units at $15) Less cost of goods sold: Net loss Direct materials Direct labor Manufacturing overhea Gross margin Less operating expenses Selling expenses Variable Sales commissions Shipping 135,000 117,450 147,750 Fixed (advertising, salaries) Administrative expenses Variable (billing and other) Fixed (salaries and other) 40,500 8,100 180,000 $675,000 400,200 274,800 228,600 2,700 72,000 74,700 ($28,500)
Transcribed Image Text:Prepare a complete projected income statement in the contribution format for each scenario, in the manner of a flexible budget. Please show work Carolina Manufacturing Company has been operating at a loss for several years. A management team has assembled to determine what course of action to take next year to reach profitability. They begin by reviewing the most recent income statement (below). Carolina Manufacturing Company Income Statement For the Year Ended December 31 Sales (45,000 units at $15) Less cost of goods sold: Net loss Direct materials Direct labor Manufacturing overhea Gross margin Less operating expenses Selling expenses Variable Sales commissions Shipping 135,000 117,450 147,750 Fixed (advertising, salaries) Administrative expenses Variable (billing and other) Fixed (salaries and other) 40,500 8,100 180,000 $675,000 400,200 274,800 228,600 2,700 72,000 74,700 ($28,500)
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