qesitoin 7 attached in ss belowthankx for helpneed it answered asapapappreicated itpi41t14pit14yip14yp1i4jy1p4iyjpitgmrgimtpmhtzezezefzezezg Suffield Motors is a chain of car dealerships. Sales in the fourth quarter of last year were $4,400,000. Suppose management projects that its current year's quarterly sales will increase by 7% inquarter 1, by another 2% in quarter 2, by another 4% in quarter 3, and by another 3% in quarter 4. Management expects cost of goods sold to be 40% of revenues every quarter, while operatingexpenses should be 35% of revenues during each of the first two quarters, 25% of revenues during the third quarter, and 20% during the fourth quarter.RequirementPrepare a budgeted income statement for each of the four quarters and for the entire year.Prepare the first portion of the budgeted income statement through gross profit, then complete the statement. (Round the amounts to the nearest whole dollar.)SalesLess: Cost of goods soldGross profitSuffield MotorsBudgeted Income StatementFor the Upcoming YearQuarter 1Quarter 2 Quarter 3CQuarter 4Year

Budgeted income statement is statement that considers company projected revenues and expected cost…

Answered: be 35% of revenues during each of the…

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be 35% of revenues during each of the first two quarters, 25% of revenues during t

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter16: Cost-volume-profit Analysis

Section: Chapter Questions

Problem 40P

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Universal Electric Company is a small, rapidly growing wholesaler of consumerelectrical products. The firm’s main product lines are small kitchen appliances andpower tools. Marcia Wilcox, Universal’s general manager of marketing, has recentlycompleted a sales forecast. She believes that the company’s sales during the first quarterof next year will increase by 10 per cent each month over the previous month’s sales.Wilcox then expects sales to remain constant for several months. Universal’s projectedbalance sheet as at 31 December this year is as follows:Cash $ 35 000Accounts receivable 270 000Marketable securities 15 000Inventory 154 000Buildings and equipment (net of acc. depr.) 626 000Total assets $1 100 000Accounts payable $176 400Long-term loan interest payable 12 500Property taxes payable 3 600Long-term loan payable (10% p.a.) 300 000Share capital 500 000Retained earnings 107 500Total liabilities and shareholders’ equity $1 100 000Jack Hanson, the assistant accountant, is now…
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