Question

The following information is available for year 1 for Pepper Products:

  

Sales revenue (240,000 units)	$	3,840,000
Manufacturing costs
Materials	$	226,000
Variable cash costs		192,000
Fixed cash costs		442,000
Depreciation (fixed)		1,348,000
Marketing and administrative costs
Marketing (variable, cash)		570,000
Marketing depreciation		202,000
Administrative (fixed, cash)		687,000
Administrative depreciation		101,000
Total costs	$	3,768,000
Operating profits	$	72,000

   
All depreciation charges are fixed and are expected to remain the same for year 2. Sales volume is expected to fall by 5 percent, but prices are expected to rise by 17 percent. Material costs per unit are expected to increase by 8 percent. Other unit variable manufacturing costs are expected to decrease by 8 percent per unit. Fixed cash costs are expected to increase by 4 percent.

  

Variable marketing costs will change with unit volume. Administrative cash costs are expected to increase by 1 percent. Inventories are 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 nearest whole dollar amounts.)

PEPPER PRODUCTS Budgeted Income Statement For Year 2 Sales revenue Manufacturing costs: Materials Other variable costs Fixed cash costs Total manufacturing costs Marketing and administrative costs: Marketing (variable, cash) Administrative (fixed, cash) Total marketing and administrative costs $ 0 Total costs Operating profit

Answer 1

Pepper products Budgeted Income Statement For Year 2 $ 42,68,160.00 Sales Revenue Manfacturing Costs : Materials Other variable costs Fixed Cash costs Depreciation $ $ $ $ 2,31,876.00 1,67,808,00 4,59,680,00 13,48,000.00 $ 22,07,364.00 Total Manfacturing Costs Marketing and Administrative costs : Marketing (variable,cash) Marketing Depreciation Administrative (variable,cash) Administrative Depreciation $ $ $ $ 5,41,500,00 2,02,000.00 6,93,870.00 1,01,000.00 Total Marketing and Administrative costs Total Costs Operating profit $ 15,38,370.00 $ 37,45,734.00 $ 5,22,426.00

FCDDF000 - Microsoft Excel - 0 X Home Insert Page Layout Formulas Data Review View Insert Function Math & Trig More Functions A a Define Name f Use in Formula Name Manager in Create from Selection Defined Names AutoSum Recently Financial Logical Text Date & Lookup & - Used - * Time Reference Function Library E7 foc X-Trace Precedents 5 Show Formulas Trace Dependents Error Checking Remove Arrows" Evaluate Formula Formula Auditing 0 Window 2 Calculate Now Calculation Calculate Sheet Options Calculation C D =3840000*0.95*1.17 =226000*0.95*1.08 =192000*0.95*0.92 -442000*1.04 1348000 1 Pepper products 2 Budgeted Income Statement 3 For Year 2 4 5 Sales Revenue 6 Manfacturing Costs : 7 Materials 8 Other variable costs 9 Fixed Cash costs 10 Depreciation 11 12 Total Manfacturing Costs 13 Marketing and Administrative costs : 14 Marketing (variable,cash) 15 Marketing Depreciation 16 Administrative (variable,cash) 17 Administrative Depreciation 18 19 Total Marketing and Administrative costs : 20 Total Costs 21 Operating profit 22 K Sheet141 Sheet142 Sheet144 Sheet146 Ready =SUM(B7:B10) =570000*0.95 202000 -687000*1.01 = 101000 =SUM(B14:B17) =B19+B12 =B5-B20 Sheet147 Sheet148 Sheet150 Sheet149 Sheet151 Februar OD 100% 0 Đ O Type here to search A A u 04:28 ra AX 24-02-2020