The Budgeted Income Statement for January, February and March

Question

Want to see more full solutions like this?

Answer 1

Question

Chapter 22, Problem 3APSA

Requirement-1:

To determine

To prepare: The Budgeted Income Statement for January, February and March

Requirement-1:

Expert Solution

Answer to Problem 3APSA

Solution: The Budgeted Income Statement for January, February and March is as follows:

MERLINE MANUFACTURING
Budgeted Income Statement
	January	February	March
Sales	$ 2,062,500	$ 2,268,750	$ 2,495,625
Cost of Goods Sold	$ 1,237,500	$ 1,361,250	$ 1,497,375
Gross Profit	$ 825,000	$ 907,500	$ 998,250
Operating Expenses:
Sales Commission	$ 206,250	$ 226,875	$ 249,563
Advertising	$ 287,500	$ 287,500	$ 287,500
Store Rent	$ 30,000	$ 30,000	$ 30,000
Administrative expenses	$ 45,000	$ 45,000	$ 45,000
Depreciation-Office Equipment	$ 50,000	$ 50,000	$ 50,000
Other expenses	$ 10,000	$ 10,000	$ 10,000
Total Expenses	$ 628,750	$ 649,375	$ 672,063

Net Income	$ 196,250	$ 258,125	$ 326,188

Explanation of Solution

Explanation: The Budgeted Income Statement for January, February and March is prepared as follows:

MERLINE MANUFACTURING
Budgeted Income Statement
	January	February	March
Unit Sales (A)	16500	18150	19965
	(15000*110%)	(16500*110%)	(18150*110%)
Selling Price (B)	$ 125	$ 125	$ 125
Sales (C) = A*B =	$ 2,062,500	$ 2,268,750	$ 2,495,625
Cost of Goods Sold (D) = A*$75 =	$ 1,237,500	$ 1,361,250	$ 1,497,375
Gross Profit (E) = C-D =	$ 825,000	$ 907,500	$ 998,250
Operating Expenses:
Sales Commission (C*10%)	$ 206,250	$ 226,875	$ 249,563
Advertising (250000*115%)	$ 287,500	$ 287,500	$ 287,500
Store Rent	$ 30,000	$ 30,000	$ 30,000
Administrative expenses	$ 45,000	$ 45,000	$ 45,000
Depreciation-Office Equipment	$ 50,000	$ 50,000	$ 50,000
Other expenses	$ 10,000	$ 10,000	$ 10,000
Total Expenses (F)	$ 628,750	$ 649,375	$ 672,063

Net Income (E-F)	$ 196,250	$ 258,125	$ 326,188

Conclusion

Conclusion:

Hence, the budgeted net income for next three months shall be as follows:

	January	February	March
Net Income	$ 196,250	$ 258,125	$ 326,188

Requirement-2:

To determine

To determine: The decision to implement the proposed change

Requirement-2:

Expert Solution

Answer to Problem 3APSA

Solution: The Management should not implement the proposed changes.

Explanation of Solution

Explanation: The Management should not implement the proposed changes because the budgeted net income for each month is less than the current net income of $515,000

Conclusion

Conclusion: Hence, the Management should not implement the proposed changes.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Students have asked these similar questions

V The debits to Work In Process-Roasting Department for Morning Brew Coffee Company for August, together with Information concerning production, are as follows: Work in process, August 1, 700 pounds, 10% completed *Direct materials (700 x $2.60) Conversion (700 x 10% x $1.00) Coffee beans added during August, 22,000 pounds Conversion costs during August Work in process, August 31, 1,100 pounds, 40% completed Goods finished during August, 21,600 pounds All direct materials are placed in process at the beginning of production. a. Prepare a cost of production report, presenting the following computations: 1. Direct materials and conversion equivalent units of production for August 2. Direct materials and conversion costs per equivalent unit for August 3. Cost of goods finished during August 4. Cost of work in process at August 31 $1,890* $1,820 70 $1,890 56,100 24,167 ? ? If an amount is zero, enter in "0". For the cost per equivalent unit, round your answer to the near st cent. Morning…

Can you help me solve this general accounting problem with the correct methodology?

Please help me solve this financial accounting problem with the correct financial process.

Answer 2

Question

Chapter 22, Problem 3APSA

Requirement-1:

To determine

To prepare: The Budgeted Income Statement for January, February and March

Requirement-1:

Expert Solution

Answer to Problem 3APSA

Solution: The Budgeted Income Statement for January, February and March is as follows:

MERLINE MANUFACTURING
Budgeted Income Statement
	January	February	March
Sales	$ 2,062,500	$ 2,268,750	$ 2,495,625
Cost of Goods Sold	$ 1,237,500	$ 1,361,250	$ 1,497,375
Gross Profit	$ 825,000	$ 907,500	$ 998,250
Operating Expenses:
Sales Commission	$ 206,250	$ 226,875	$ 249,563
Advertising	$ 287,500	$ 287,500	$ 287,500
Store Rent	$ 30,000	$ 30,000	$ 30,000
Administrative expenses	$ 45,000	$ 45,000	$ 45,000
Depreciation-Office Equipment	$ 50,000	$ 50,000	$ 50,000
Other expenses	$ 10,000	$ 10,000	$ 10,000
Total Expenses	$ 628,750	$ 649,375	$ 672,063

Net Income	$ 196,250	$ 258,125	$ 326,188

Explanation of Solution

Explanation: The Budgeted Income Statement for January, February and March is prepared as follows:

MERLINE MANUFACTURING
Budgeted Income Statement
	January	February	March
Unit Sales (A)	16500	18150	19965
	(15000*110%)	(16500*110%)	(18150*110%)
Selling Price (B)	$ 125	$ 125	$ 125
Sales (C) = A*B =	$ 2,062,500	$ 2,268,750	$ 2,495,625
Cost of Goods Sold (D) = A*$75 =	$ 1,237,500	$ 1,361,250	$ 1,497,375
Gross Profit (E) = C-D =	$ 825,000	$ 907,500	$ 998,250
Operating Expenses:
Sales Commission (C*10%)	$ 206,250	$ 226,875	$ 249,563
Advertising (250000*115%)	$ 287,500	$ 287,500	$ 287,500
Store Rent	$ 30,000	$ 30,000	$ 30,000
Administrative expenses	$ 45,000	$ 45,000	$ 45,000
Depreciation-Office Equipment	$ 50,000	$ 50,000	$ 50,000
Other expenses	$ 10,000	$ 10,000	$ 10,000
Total Expenses (F)	$ 628,750	$ 649,375	$ 672,063

Net Income (E-F)	$ 196,250	$ 258,125	$ 326,188

Conclusion

Conclusion:

Hence, the budgeted net income for next three months shall be as follows:

	January	February	March
Net Income	$ 196,250	$ 258,125	$ 326,188

Requirement-2:

To determine

To determine: The decision to implement the proposed change

Requirement-2:

Expert Solution

Answer to Problem 3APSA

Solution: The Management should not implement the proposed changes.

Explanation of Solution

Explanation: The Management should not implement the proposed changes because the budgeted net income for each month is less than the current net income of $515,000

Conclusion

Conclusion: Hence, the Management should not implement the proposed changes.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 3

Question

Chapter 22, Problem 3APSA

Requirement-1:

To determine

To prepare: The Budgeted Income Statement for January, February and March

Requirement-1:

Expert Solution

Answer to Problem 3APSA

Solution: The Budgeted Income Statement for January, February and March is as follows:

MERLINE MANUFACTURING
Budgeted Income Statement
	January	February	March
Sales	$ 2,062,500	$ 2,268,750	$ 2,495,625
Cost of Goods Sold	$ 1,237,500	$ 1,361,250	$ 1,497,375
Gross Profit	$ 825,000	$ 907,500	$ 998,250
Operating Expenses:
Sales Commission	$ 206,250	$ 226,875	$ 249,563
Advertising	$ 287,500	$ 287,500	$ 287,500
Store Rent	$ 30,000	$ 30,000	$ 30,000
Administrative expenses	$ 45,000	$ 45,000	$ 45,000
Depreciation-Office Equipment	$ 50,000	$ 50,000	$ 50,000
Other expenses	$ 10,000	$ 10,000	$ 10,000
Total Expenses	$ 628,750	$ 649,375	$ 672,063

Net Income	$ 196,250	$ 258,125	$ 326,188

Explanation of Solution

Explanation: The Budgeted Income Statement for January, February and March is prepared as follows:

MERLINE MANUFACTURING
Budgeted Income Statement
	January	February	March
Unit Sales (A)	16500	18150	19965
	(15000*110%)	(16500*110%)	(18150*110%)
Selling Price (B)	$ 125	$ 125	$ 125
Sales (C) = A*B =	$ 2,062,500	$ 2,268,750	$ 2,495,625
Cost of Goods Sold (D) = A*$75 =	$ 1,237,500	$ 1,361,250	$ 1,497,375
Gross Profit (E) = C-D =	$ 825,000	$ 907,500	$ 998,250
Operating Expenses:
Sales Commission (C*10%)	$ 206,250	$ 226,875	$ 249,563
Advertising (250000*115%)	$ 287,500	$ 287,500	$ 287,500
Store Rent	$ 30,000	$ 30,000	$ 30,000
Administrative expenses	$ 45,000	$ 45,000	$ 45,000
Depreciation-Office Equipment	$ 50,000	$ 50,000	$ 50,000
Other expenses	$ 10,000	$ 10,000	$ 10,000
Total Expenses (F)	$ 628,750	$ 649,375	$ 672,063

Net Income (E-F)	$ 196,250	$ 258,125	$ 326,188

Conclusion

Conclusion:

Hence, the budgeted net income for next three months shall be as follows:

	January	February	March
Net Income	$ 196,250	$ 258,125	$ 326,188

Requirement-2:

To determine

To determine: The decision to implement the proposed change

Requirement-2:

Expert Solution

Answer to Problem 3APSA

Solution: The Management should not implement the proposed changes.

Explanation of Solution

Explanation: The Management should not implement the proposed changes because the budgeted net income for each month is less than the current net income of $515,000

Conclusion

Conclusion: Hence, the Management should not implement the proposed changes.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 4

Question

Chapter 22, Problem 3APSA

Requirement-1:

To determine

To prepare: The Budgeted Income Statement for January, February and March

Requirement-1:

Expert Solution

Answer to Problem 3APSA

Solution: The Budgeted Income Statement for January, February and March is as follows:

MERLINE MANUFACTURING
Budgeted Income Statement
	January	February	March
Sales	$ 2,062,500	$ 2,268,750	$ 2,495,625
Cost of Goods Sold	$ 1,237,500	$ 1,361,250	$ 1,497,375
Gross Profit	$ 825,000	$ 907,500	$ 998,250
Operating Expenses:
Sales Commission	$ 206,250	$ 226,875	$ 249,563
Advertising	$ 287,500	$ 287,500	$ 287,500
Store Rent	$ 30,000	$ 30,000	$ 30,000
Administrative expenses	$ 45,000	$ 45,000	$ 45,000
Depreciation-Office Equipment	$ 50,000	$ 50,000	$ 50,000
Other expenses	$ 10,000	$ 10,000	$ 10,000
Total Expenses	$ 628,750	$ 649,375	$ 672,063

Net Income	$ 196,250	$ 258,125	$ 326,188

Explanation of Solution

Explanation: The Budgeted Income Statement for January, February and March is prepared as follows:

MERLINE MANUFACTURING
Budgeted Income Statement
	January	February	March
Unit Sales (A)	16500	18150	19965
	(15000*110%)	(16500*110%)	(18150*110%)
Selling Price (B)	$ 125	$ 125	$ 125
Sales (C) = A*B =	$ 2,062,500	$ 2,268,750	$ 2,495,625
Cost of Goods Sold (D) = A*$75 =	$ 1,237,500	$ 1,361,250	$ 1,497,375
Gross Profit (E) = C-D =	$ 825,000	$ 907,500	$ 998,250
Operating Expenses:
Sales Commission (C*10%)	$ 206,250	$ 226,875	$ 249,563
Advertising (250000*115%)	$ 287,500	$ 287,500	$ 287,500
Store Rent	$ 30,000	$ 30,000	$ 30,000
Administrative expenses	$ 45,000	$ 45,000	$ 45,000
Depreciation-Office Equipment	$ 50,000	$ 50,000	$ 50,000
Other expenses	$ 10,000	$ 10,000	$ 10,000
Total Expenses (F)	$ 628,750	$ 649,375	$ 672,063

Net Income (E-F)	$ 196,250	$ 258,125	$ 326,188

Conclusion

Conclusion:

Hence, the budgeted net income for next three months shall be as follows:

	January	February	March
Net Income	$ 196,250	$ 258,125	$ 326,188

Requirement-2:

To determine

To determine: The decision to implement the proposed change

Requirement-2:

Expert Solution

Answer to Problem 3APSA

Solution: The Management should not implement the proposed changes.

Explanation of Solution

Explanation: The Management should not implement the proposed changes because the budgeted net income for each month is less than the current net income of $515,000

Conclusion

Conclusion: Hence, the Management should not implement the proposed changes.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 5

Chapter 22, Problem 3APSA

Requirement-1:

To determine

To prepare: The Budgeted Income Statement for January, February and March

Requirement-1:

Expert Solution

Answer to Problem 3APSA

Solution: The Budgeted Income Statement for January, February and March is as follows:

MERLINE MANUFACTURING
Budgeted Income Statement
	January	February	March
Sales	$ 2,062,500	$ 2,268,750	$ 2,495,625
Cost of Goods Sold	$ 1,237,500	$ 1,361,250	$ 1,497,375
Gross Profit	$ 825,000	$ 907,500	$ 998,250
Operating Expenses:
Sales Commission	$ 206,250	$ 226,875	$ 249,563
Advertising	$ 287,500	$ 287,500	$ 287,500
Store Rent	$ 30,000	$ 30,000	$ 30,000
Administrative expenses	$ 45,000	$ 45,000	$ 45,000
Depreciation-Office Equipment	$ 50,000	$ 50,000	$ 50,000
Other expenses	$ 10,000	$ 10,000	$ 10,000
Total Expenses	$ 628,750	$ 649,375	$ 672,063

Net Income	$ 196,250	$ 258,125	$ 326,188

Explanation of Solution

Explanation: The Budgeted Income Statement for January, February and March is prepared as follows:

MERLINE MANUFACTURING
Budgeted Income Statement
	January	February	March
Unit Sales (A)	16500	18150	19965
	(15000*110%)	(16500*110%)	(18150*110%)
Selling Price (B)	$ 125	$ 125	$ 125
Sales (C) = A*B =	$ 2,062,500	$ 2,268,750	$ 2,495,625
Cost of Goods Sold (D) = A*$75 =	$ 1,237,500	$ 1,361,250	$ 1,497,375
Gross Profit (E) = C-D =	$ 825,000	$ 907,500	$ 998,250
Operating Expenses:
Sales Commission (C*10%)	$ 206,250	$ 226,875	$ 249,563
Advertising (250000*115%)	$ 287,500	$ 287,500	$ 287,500
Store Rent	$ 30,000	$ 30,000	$ 30,000
Administrative expenses	$ 45,000	$ 45,000	$ 45,000
Depreciation-Office Equipment	$ 50,000	$ 50,000	$ 50,000
Other expenses	$ 10,000	$ 10,000	$ 10,000
Total Expenses (F)	$ 628,750	$ 649,375	$ 672,063

Net Income (E-F)	$ 196,250	$ 258,125	$ 326,188

Conclusion

Conclusion:

Hence, the budgeted net income for next three months shall be as follows:

	January	February	March
Net Income	$ 196,250	$ 258,125	$ 326,188

Requirement-2:

To determine

To determine: The decision to implement the proposed change

Requirement-2:

Expert Solution

Answer to Problem 3APSA

Solution: The Management should not implement the proposed changes.

Explanation of Solution

Explanation: The Management should not implement the proposed changes because the budgeted net income for each month is less than the current net income of $515,000

Conclusion

Conclusion: Hence, the Management should not implement the proposed changes.

Answer 6

Chapter 22, Problem 3APSA

Requirement-1:

To determine

To prepare: The Budgeted Income Statement for January, February and March

Requirement-1:

Expert Solution

Answer to Problem 3APSA

Solution: The Budgeted Income Statement for January, February and March is as follows:

MERLINE MANUFACTURING
Budgeted Income Statement
	January	February	March
Sales	$ 2,062,500	$ 2,268,750	$ 2,495,625
Cost of Goods Sold	$ 1,237,500	$ 1,361,250	$ 1,497,375
Gross Profit	$ 825,000	$ 907,500	$ 998,250
Operating Expenses:
Sales Commission	$ 206,250	$ 226,875	$ 249,563
Advertising	$ 287,500	$ 287,500	$ 287,500
Store Rent	$ 30,000	$ 30,000	$ 30,000
Administrative expenses	$ 45,000	$ 45,000	$ 45,000
Depreciation-Office Equipment	$ 50,000	$ 50,000	$ 50,000
Other expenses	$ 10,000	$ 10,000	$ 10,000
Total Expenses	$ 628,750	$ 649,375	$ 672,063

Net Income	$ 196,250	$ 258,125	$ 326,188

Explanation of Solution

Explanation: The Budgeted Income Statement for January, February and March is prepared as follows:

MERLINE MANUFACTURING
Budgeted Income Statement
	January	February	March
Unit Sales (A)	16500	18150	19965
	(15000*110%)	(16500*110%)	(18150*110%)
Selling Price (B)	$ 125	$ 125	$ 125
Sales (C) = A*B =	$ 2,062,500	$ 2,268,750	$ 2,495,625
Cost of Goods Sold (D) = A*$75 =	$ 1,237,500	$ 1,361,250	$ 1,497,375
Gross Profit (E) = C-D =	$ 825,000	$ 907,500	$ 998,250
Operating Expenses:
Sales Commission (C*10%)	$ 206,250	$ 226,875	$ 249,563
Advertising (250000*115%)	$ 287,500	$ 287,500	$ 287,500
Store Rent	$ 30,000	$ 30,000	$ 30,000
Administrative expenses	$ 45,000	$ 45,000	$ 45,000
Depreciation-Office Equipment	$ 50,000	$ 50,000	$ 50,000
Other expenses	$ 10,000	$ 10,000	$ 10,000
Total Expenses (F)	$ 628,750	$ 649,375	$ 672,063

Net Income (E-F)	$ 196,250	$ 258,125	$ 326,188

Conclusion

Conclusion:

Hence, the budgeted net income for next three months shall be as follows:

	January	February	March
Net Income	$ 196,250	$ 258,125	$ 326,188

Answer 7

Chapter 22, Problem 3APSA

Requirement-1:

To determine

To prepare: The Budgeted Income Statement for January, February and March

Answer 8

Requirement-1:

Expert Solution

Answer to Problem 3APSA

Solution: The Budgeted Income Statement for January, February and March is as follows:

MERLINE MANUFACTURING
Budgeted Income Statement
	January	February	March
Sales	$ 2,062,500	$ 2,268,750	$ 2,495,625
Cost of Goods Sold	$ 1,237,500	$ 1,361,250	$ 1,497,375
Gross Profit	$ 825,000	$ 907,500	$ 998,250
Operating Expenses:
Sales Commission	$ 206,250	$ 226,875	$ 249,563
Advertising	$ 287,500	$ 287,500	$ 287,500
Store Rent	$ 30,000	$ 30,000	$ 30,000
Administrative expenses	$ 45,000	$ 45,000	$ 45,000
Depreciation-Office Equipment	$ 50,000	$ 50,000	$ 50,000
Other expenses	$ 10,000	$ 10,000	$ 10,000
Total Expenses	$ 628,750	$ 649,375	$ 672,063

Net Income	$ 196,250	$ 258,125	$ 326,188

Answer 9

Requirement-1:

Expert Solution

Answer 10

Requirement-1:

Expert Solution

Answer 11

Expert Solution

Answer 12

Explanation of Solution

Explanation: The Budgeted Income Statement for January, February and March is prepared as follows:

MERLINE MANUFACTURING
Budgeted Income Statement
	January	February	March
Unit Sales (A)	16500	18150	19965
	(15000*110%)	(16500*110%)	(18150*110%)
Selling Price (B)	$ 125	$ 125	$ 125
Sales (C) = A*B =	$ 2,062,500	$ 2,268,750	$ 2,495,625
Cost of Goods Sold (D) = A*$75 =	$ 1,237,500	$ 1,361,250	$ 1,497,375
Gross Profit (E) = C-D =	$ 825,000	$ 907,500	$ 998,250
Operating Expenses:
Sales Commission (C*10%)	$ 206,250	$ 226,875	$ 249,563
Advertising (250000*115%)	$ 287,500	$ 287,500	$ 287,500
Store Rent	$ 30,000	$ 30,000	$ 30,000
Administrative expenses	$ 45,000	$ 45,000	$ 45,000
Depreciation-Office Equipment	$ 50,000	$ 50,000	$ 50,000
Other expenses	$ 10,000	$ 10,000	$ 10,000
Total Expenses (F)	$ 628,750	$ 649,375	$ 672,063

Net Income (E-F)	$ 196,250	$ 258,125	$ 326,188

Answer 13

Conclusion

Conclusion:

Hence, the budgeted net income for next three months shall be as follows:

	January	February	March
Net Income	$ 196,250	$ 258,125	$ 326,188

Answer 14

Requirement-2:

To determine

To determine: The decision to implement the proposed change

Requirement-2:

Expert Solution

Answer to Problem 3APSA

Solution: The Management should not implement the proposed changes.

Explanation of Solution

Explanation: The Management should not implement the proposed changes because the budgeted net income for each month is less than the current net income of $515,000

Conclusion

Conclusion: Hence, the Management should not implement the proposed changes.

Answer 15

Requirement-2:

To determine

To determine: The decision to implement the proposed change

Answer 16

Requirement-2:

Expert Solution

Answer to Problem 3APSA

Solution: The Management should not implement the proposed changes.

Answer 17

Requirement-2:

Expert Solution

Answer 18

Requirement-2:

Expert Solution

Answer 19

Expert Solution

Answer 20

Explanation of Solution

Explanation: The Management should not implement the proposed changes because the budgeted net income for each month is less than the current net income of $515,000