The following information is available for year 1 for Pepper Products:$6,160,000Sales revenue (220,000 units)Manufacturing costsMaterials$ 363,000Variable cash costs308,000708,0002,159,000Fixed cash costsDepreciation (fixed)Marketing and administrative costsMarketing (variable, cash)Marketing depreciationAdministrative (fixed, cash)Administrative depreciation913,000323,0001,099,000161,000$6,034,000$ 126,000Total costsOperating profitsAll depreciation charges are fixed and are expected to remain the same for year 2. Sales volume is expected to fall by 3 percent, butprices are expected to rise by 13 percent. Material costs per unit are expected to increase by 10 percent. Other unit variablemanufacturing costs are expected to decrease by 7 percent per unit. Fixed cash costs are expected to increase by 2 percent.Variable marketing costs will change with unit volume. Administrative cash costs are expected to increase by 3 percent. Inventoriesare kept at zero. Pepper Products operates on a cash basis.Required:Prepare a budgeted income statement for year 2. (Do not round intermediate calculations. Round your final answers to the nearestwhole dollar amounts.) 8 Answer is complete but not entirely correct.PEPPER PRODUCTSBudgeted Income StatementFor Year 2Sales revenue$24,374 8Manufacturing costs:Materials3,535 XDepreciation (fixed)8,578 X2,456 X2,478 X7,645 XAdministrative depreciationFixed cash costsDepreciation (fixed)Total manufacturing costsMarketing and administrative costs:2424,6925,666 X5,625 XMarketing (variable, cash)Depreciation (fixed)Administrative depreciation6,513 X8,763 X5,664 XMaterialsSales revenueTotal marketing and administrative costs$32,231Total costs$56,923Operating profit$565 X%24%24

The income statement explains the financial performance of the company for a particular period of…

Answered: The following information is available…

The following information is available for year 1 for Pepper Pr $6,160,000 Sales revenue (220,000 units) Manufacturing costs $ 363,000 308,000 Materials Variable cash costs Eixed cash costs 798 9a9

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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