Coyle Manufacturing reports the following information for year 1:Sales revenue (60,000 units)$ 5,130,000Manufacturing costsMaterials$ 302,000256,000Variable cash costsFixed cash costs.Depreciation (fixed)590,0001,800,000Marketing and administrative costsMarketing (variable, cash)Marketing depreciationAdministrative (fixed, cash)Administrative depreciationTotal costsOperating profits (losses)760,000269,000916,000134,000$ 5,027,000$ 103,000All depreciation charges are fixed. Manufacturing depreciation is expected to increase by 10 percent in year 2. Marketing andadministrative depreciation are expected to remain the same for year 2. Sales volume is expected to increase by 5 percent, but pricesare expected to fall by 10 percent. Materials costs per unit are expected to decrease by 8 percent. Unit variable cash manufacturingcosts are expected to increase by 15 percent. Fixed cash costs are expected to increase by 6 percent.Variable marketing costs will change with unit volume. Administrative cash costs are expected to decrease by 10 percent. Inventoriesare kept at zero. Coyle Manufacturing operates on a cash basis.Required:Prepare a budgeted income statement for year 2 for Coyle Manufacturing.Note: Do not round intermediate calculations.

The budgeted income statement provides a clear and organized summary of predicted financial…

Answered: Sales revenue (60,000 units)…

Sales revenue (60,000 units) Manufacturing costs Materials Variable cash costs Fixed cash costs Depreciation (fixed) Marketing and administrative costs $ 5,130,000 $ 302,000 256,000 590,000 1,800,000

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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