The following
information is available for year 1 for Pepper Products:
Sales revenue (200,000 units) | $ | 2,850,000 |
Manufacturing costs | ||
Materials | $ | 168,000 |
Variable cash costs | 142,400 | |
Fixed cash costs | 327,600 | |
Depreciation (fixed) | 999,000 | |
Marketing and administrative costs | ||
Marketing (variable, cash) | 422,400 | |
Marketing depreciation | 149,600 | |
Administrative (fixed, cash) | 509,200 | |
Administrative depreciation | 74,800 | |
Total costs | $ | 2,793,000 |
Operating profits | $ | 57,000 |
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 15 percent. Material costs per unit
are expected to increase by 12 percent. Other unit variable
manufacturing costs are expected to decrease by 10 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 5 percent. Inventories are kept
at zero. Pepper Products operates on a cash
basis.
Required:
Estimate the cash from operations expected in year 2. (Do not round intermediate calculations.)
Pepper Products
Cash basis income statement:
for year 2
sales revenue (200,000-5%)=> (190,000 units) *(16.3875 ) (see working) | 3,113,625 |
manufacturing costs: | |
materials (190,000*0.9408) | 178,752 |
variable cash cost (190,000*0.6408) | 121,752 |
fixed cash cost (327,600+4%) | 340,704 |
total cash manufacturing cost | 641,208 |
marketing and administrative cost | |
marketing (variable, cash) (422,400/200,000)*190,000 | 401,280 |
administrative (fixed, cash) | 534,660 |
total cash marketing and administrative costs | 935,940 |
total cash cost | 1,577,148 |
cash from operations in year 2 | 1,536,477 |
working:
existing price = $2,850,000 / 200,000 units
=>$14.25.
new price = $14.25+15%
=>$16.3875
material cost per unit :
existing =$168,000 /200,000 units
=>$0.84 per unit
new material cost = $0.84 +12% =>$0.9408.
variable cash cost:
existing = 142,400 /200,000 =>0.712
new per unit cost = 0.712-10% =>0.6408
The following information is available for year 1 for Pepper Products: Sales revenue (200,000 units)...
The following information is available for year 1 for Pepper Products: Sales revenue (200,000 units) $ 2,850,000 Manufacturing costs Materials $ 168,000 Variable cash costs 142,400 Fixed cash costs 327,600 Depreciation (fixed) 999,000 Marketing and administrative costs Marketing (variable, cash) 422,400 Marketing depreciation 149,600 Administrative (fixed, cash) 509,200 Administrative depreciation 74,800 Total costs $ 2,793,000 Operating profits $ 57,000 All depreciation charges are fixed and are expected to remain the same for year 2. Sales volume is expected...
The following information is available for year 1 for Pepper Products: Sales revenue (200,000 units) $ 2,850,000 Manufacturing costs Materials $ 168,000 Variable cash costs 142,400 Fixed cash costs 327,600 Depreciation (fixed) 999,000 Marketing and administrative costs Marketing (variable, cash) 422,400 Marketing depreciation 149,600 Administrative (fixed, cash) 509,200 Administrative depreciation 74,800 Total costs $ 2,793,000 Operating profits $ 57,000 All depreciation charges are fixed and are expected to remain the same for year 2. Sales volume is expected...
The following information is available for year 1 for Pepper Products: Sales revenue (200,000 units) $ 3,000,000 Manufacturing costs Materials $ 168,000 Variable cash costs 142,400 Fixed cash costs 317,600 Depreciation (fixed) 989,000 Marketing and administrative costs Marketing (variable, cash) 432,400 Marketing depreciation 149,600 Administrative (fixed, cash) 519,200 Administrative depreciation 74,800 Total costs $ 2,793,000 Operating profits $ 207,000 All depreciation charges are fixed and are expected to remain the same for year 2. Sales volume is expected...
13-51. Prepare Budgeted Financial Statements (LO 13-6) eXcel The following information is available for year 1 for Pepper Products. $2,850,000 Sales revenue (200,000 units) Manufacturing costs $168,000 Materials 142,400 327,600 Variable cash costs Fixed cash costs Depreciation (fixed) Marketing and administrative costs 999,000 Marketing (variable, cash) 422,400 Marketing depreciation 149,600 Administrative (fixed, cash) 509,200 Administrative depreciation 74,800 Total costs $2.793,000 Operating profits $ 57,000 All depreciation charges are fixed and are expected to remain the same for year 2. Sales...
The following information is available for year 1 for Pepper Products: Sales revenue (210,000 units) $ 3,150,000 Manufacturing costs Materials $ 168,000 Variable cash costs 142,400 Fixed cash costs 327,600 Depreciation (fixed) 989,000 Marketing and administrative costs Marketing (variable, cash) 422,400 Marketing depreciation 159,600 Administrative (fixed, cash) 509,200 Administrative depreciation 84,800 Total costs $ 2,803,000 Operating profits $ 347,000 All depreciation charges are fixed and are expected to remain the same for year 2. Sales volume is expected...
Problem 13-51 (Static) Prepare Budgeted Financial Statements (LO 13-6) The following information is available for year 1 for Pepper Products: $2,850,000 Sales revenue (200,000 units) Manufacturing costs Materials 168,000 Variable cash costs 142,400 327,600 Fixed cash costs Depreciation (fixed) Marketing and administrative costs Marketing (variable, cash) Marketing depreciation Administrative (fixed, cash) Administrative depreciation Total costs 999,000 422,400 149,600 509, 200 74,800 $2,793,000 57,000 Operating profits All depreciation charges are fixed and are expected to remain the same for year 2....
The following information is available for year 1 for Pepper Products: Sales revenue (210,000 units) $ 3,150,000 Manufacturing costs Materials $ 168,000 Variable cash costs 142,400 Fixed cash costs 337,600 Depreciation (fixed) 1,009,000 Marketing and administrative costs Marketing (variable, cash) 412,400 Marketing depreciation 159,600 Administrative (fixed, cash) 509,200 Administrative depreciation 84,800 Total costs $ 2,823,000 Operating profits $ 327,000 All depreciation charges are fixed and are expected to remain the same for year 2. Sales volume is expected...
The following information is available for year 1 for Pepper Products: $2,900,000 $ 168,000 152,400 327,600 989,000 Sales revenue (200,000 units) Manufacturing costs Materials Variable cash costs Fixed cash costs Depreciation (fixed) Marketing and administrative costs Marketing (variable, cash) Marketing depreciation Administrative (fixed, cash) Administrative depreciation Total costs Operating profits 412,400 149,600 509,200 64,800 $2,773,000 $ 127,000 All depreciation charges are fixed and are expected to remain the same for year 2. Sales volume is expected to fall by 4...
The following information is available for year 1 for Pepper Products $2.850.000 $ 168.000 142.100 327.600 899,000 Sales revenus 200,000 units) Manufacturing costs Materials Variable cash costs Foxed cash coete Depreciation foed) Marketing and administrative coats Marketing (variable, cashi Marketing depreciation Administrative (beo, cash) Administrative depreciation Total costs Operating profits 122.100 149.600 509,200 74,800 $2,793,000 $ 57.000 All depreciation charges are fixed and are expected to remain the same for year 2. Seles volume is expected to tell by 5...
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...