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Smith and Sons_Budgeted income statement




Question;Smith and Sons is developing;the 2011 budget. In 2011 the company would like to increase selling prices by;20%, and as a result expects a decrease in sales volume of 10%. Cost of goods;sold as a percentage of sales is expected to increase to 65%. Other than;depreciation, all operating costs are variable as a percentage of total sales.;Prepare a budgeted income statement for 2011;Additional;Requirements;Sales;(100,000 units) $400,000/$100,000 = $ 4 per unit $400,000;Less;cost of goods sold ($250,000/$400,000= 62.5%) 250,000;Gross;profit (150,000/250,000 =.37.5) 150,000;Operating;expenses (includes $10,000 of depreciation);((110,000;-10,000)/100,000 units = $1.00 per unit) 110,000;Net;income (40,000/400,000 = 10%) $ 40,000


Paper#37318 | Written in 18-Jul-2015

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