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Relevant Information Skin Cream...

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Question

Accounting

Relevant Information
Skin Cream Bath Oil Color Gel
Budgeted sales in units (a) 114,000 194,000 74,000
Expected sales price (b) $ 10 $ 7 $ 13
Variable costs per unit (c) $ 2 $ 2 $ 7
Income statements
Sales revenue (a b) $ 1,140,000 $ 1,358,000 $ 962,000
Variable costs (a c) (228,000 ) (388,000 ) (518,000 )
Contribution margin 912,000 970,000 444,000
Fixed costs (624,000 ) (650,000 ) (126,000 )
Net income $ 288,000 $ 320,000 $ 318,000

Required:

Prepare revised income statements for each product, assuming a 20 percent increase in the budgeted sales volume.

FRANKLIN COMPANY
Income Statements
Skin Cream Bath Oil Color Gel
Sales revenue
Variable costs
Contribution margin $0 $0 $0
Fixed cost 624,000 650,000 126,000
Net income $(624,000) $(650,000) $(126,000)

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