The following information is available for year 1 for Pepper Products: Sales revenue...
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Accounting
The following information is available for year 1 for Pepper Products:
Sales revenue (190,000 units)
$
3,800,000
Manufacturing costs
Materials
$
224,000
Variable cash costs
190,000
Fixed cash costs
438,000
Depreciation (fixed)
1,336,000
Marketing and administrative costs
Marketing (variable, cash)
565,000
Marketing depreciation
201,000
Administrative (fixed, cash)
684,000
Administrative depreciation
100,000
Total costs
$
3,738,000
Operating profits
$
62,000
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 7 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 3 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.)
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