Using Actual Results for 2020, Prepare Budgeted Income Statement for 2021 2020 Revenues Actual Sales of Equipment $ 6,000,00O Sales of Maintenance Contracts 1,800,000 Total revenues $ 7,800,000 Cost of goods sold 4,600,000 Gross margin $ 3,200,000 Operating expenses Marketing 600,000 Distribution 150,000 Customer maintenance 1,000,000 Administration 900,000 Total expenses 2,650,000 Operating Income 550,000 1. Selling prices of equipment are expected to increase by 10% as the economic recovery begins. 2. Selling price of maintenance contract is expected to remain unchanged. 3. Equipment sales in units are expected to increase by 6%, with a corresponding 6% growth in units of maintenance contracts. 4. Cost of each unit of equipment sold is expected to increase by 3% to pay for the necessary technology and quality improvements. 5. Marketing costs are expected to increase by $250,000, but administration costs are expected to remain the same. 6. Distribution costs vary in proportion to the number of units of equipment sold. 7. Two maintenance technicians are to be hired at a total cost of $130,000, to improve customer service and shorten response time. 8. There is no beginning or ending inventory.

Using Actual Results for 2020, Prepare Budgeted Income Statement for 2021 2020 Revenues Actual Sales of Equipment $ 6,000,00O Sales of Maintenance Contracts 1,800,000 Total revenues $ 7,800,000 Cost of goods sold 4,600,000 Gross margin $ 3,200,000 Operating expenses Marketing 600,000 Distribution 150,000 Customer maintenance 1,000,000 Administration 900,000 Total expenses 2,650,000 Operating Income 550,000 1. Selling prices of equipment are expected to increase by 10% as the economic recovery begins. 2. Selling price of maintenance contract is expected to remain unchanged. 3. Equipment sales in units are expected to increase by 6%, with a corresponding 6% growth in units of maintenance contracts. 4. Cost of each unit of equipment sold is expected to increase by 3% to pay for the necessary technology and quality improvements. 5. Marketing costs are expected to increase by $250,000, but administration costs are expected to remain the same. 6. Distribution costs vary in proportion to the number of units of equipment sold. 7. Two maintenance technicians are to be hired at a total cost of $130,000, to improve customer service and shorten response time. 8. There is no beginning or ending inventory.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

The Current Designs staff has prepared the annual manufacturing budget for the rotomolded line based on an estimated annual production of 4,640 kayaks during 2022. Each kayak will require 56 pounds of polyethylene powder and a finishing kit (rope, seat, hardware, etc.). The polyethylene powder used in these kayaks costs $1.20 per pound, and the finishing kits cost $210 each. Each kayak will use two kinds of labor-2 hours of type I labor from people who run the oven and trim the plastic, and 3 hours of work from type II workers who attach the hatches and seat and other hardware. The type I employees are paid $17 per hour, and the type II are paid $14 per hour. Manufacturing overhead is budgeted at $414,840 for 2022, broken down as follows. Variable costs Indirect materials $46,400 Manufacturing supplies 64,960 Maintenance and utilities 102,080 213,440 Fixed costs Supervision 78,000 Insurance 13,200 Depreciation 110,200 201,400 Total $414,840 During the first quarter, ended March 31,…
please dont give solution in imsge thnku
Sandhill Painting Service has budgeted the following time and material for 2022: BUDGETED COSTS FOR 2022 Time Charges $35,280 Painters' wages and benefits Service manager's salary and benefits Office employee's salary and benefits Cost of paint Overhead (supplies, utilities, etc.) Total budgeted costs 11,760 15,680 $62,720 Material Charges $22,540 2,940 49,000 8,330 $82,810 Sandhill budgets 4,000 hours of paint time in 2022 and will charge a profit of $12.00 per hour in addition to a 20% markup on the cost of paint. On February 15, 2022, Sandhill is asked to prepare a price estimate to paint a small building Sandhill estimates that i this job will take 12 labor hours and $490.00 in paint.
Please do not give image format
accounting question
Chelsea Clinic projected the following budget information for 2020: Total FFS Visit Volume 90,000 visits Payer Mix: Blue Cross Highmark Reimbursement Rates: Blue Cross Highmark Variable Costs Resource Inputs: Labor Supplies Resource Input Prices: Labor Supplies Fixed Costs (overhead, plant, and equipment) 40% 60% $25 per visit $20 per visit 48,000 total hours 100,000 total units $25.00 per hour $1.50 per unit $500,000 a. Construct Chelsea Clinic’s operating budget for 2020. b. Discuss how each key budget assumption might result in a budget variance, and name the variance that would be used to examine results associated with each assumption.
5. Archer's cost accountant prepared the following static budget based on expected activity of 4,000 units for the May 2022 accounting period: Sales Revenue $64,000 Variable Costs (34.000) Contribution Margin $30,000 (20.000) $10,000 Fixed Costs Net Income a. If Archer's sales manager were to prepare a flexible budget for expected activity of 4,300 units, budgeted net income on this flexible budget would be? b. If Archer actually produced and sold 4,300 units at $20 each, what is the sales revenue activity/volume variance? Indicate favorable / unfavorable variances c. If Archer actually incurred the following costs during May 2022: Sales Revenue Variable Costs Contribution Margin $49,000 Fixed Costs $86,000 (37.000) (22.000) $27,000 Net Income The flexible budget variance for: Indicate favorable / unfavorable variances i. Fixed costs: ii. Variable costs:
E9-3A Budget Preparation Westport Company is preparing its master budget for May. Use the estimates provided to determine the amounts necessary for each of the following requirements. (Estimates may be related to more than one requirement.) a. What should total sales revenue be if territories E and W estimate sales of 50,000 and 100,000 units, respectively, and the unit selling price is $30? b. If the beginning finished goods inventory is an estimated 6,000 units and the desired ending inventory is 7,000 units, how many units should be produced? c. What dollar amount of materials should be purchased at $2 per pound if each unit of product requires 2.5 pounds and beginning and ending materials inventories should be 12,000 and 13,500 pounds, respectively? d. How much direct labor cost should be incurred if each unit produced requires 0.5 hours at an…