BELOW IS THE INCOME STATEMENT FOR NEW COMPANY FOR JANUARY 2020SALESPER UNIT$75SALES VOLUME185000$13,875,000COSTSCOST OF GOODS SOLD8,960,250MARKETING AND ADMIN (FIXED)1,500,000TOTAL COSTS10,460,250OPERATING PROFIT3,414,750TAXES1,126,8682,287,8820.33PROFIT AFTER TAXESPREPARE A BUDGET FOR FEBRUARY TAKING INTO ACCOUNT THE FOLLOWINGSALES VOLUME WILL INCREASE 30 PERCENTUNIT SALE VALUE WILL DECREASE 5 PERCENTCOST OF GOODS SOLD WILL INCREASE LIKE SALESMARKETING AND ADMIN WILL DECREASE 6 PERCENTTAX RATE WILL INCREASE 3 PERCENTAGE POINTS

Operating Profit = Sales - Total Cost Total cost = Cost of goods sold + Marketing and Administrative…

BELOW IS THE INCOME STATEMENT FOR NEW COMPANY FOR JANUARY 2020 SALES PER UNIT $75 SALES VOLUME 185000 $13,875,000 COSTS COST OF GOODS SOLD 8,960,250 MARKETING AND ADMIN (FIXED) 1,500,000 TOTAL COSTS 10,460,250 3,414,750 1,126,868 OPERATING PROFIT TAXES 0.33 PROFIT AFTER TAXES 2,287,882 PREPARE A BUDGET FOR FEBRUARY TAKING INTO ACCOUNT THE FOLLOWING SALES VOLUME WILL INCREASE 30 PERCENT UNIT SALE VALUE WILL DECREASE 5 PERCENT COST OF GOODS SOLD WILL INCREASE LIKE SALES MARKETING AND ADMIN WILL DECREASE 6 PERCENT TAX RATE WILL INCREASE 3 PERCENTAGE POINTS

BELOW IS THE INCOME STATEMENT FOR NEW COMPANY FOR JANUARY 2020 SALES PER UNIT $75 SALES VOLUME 185000 $13,875,000 COSTS COST OF GOODS SOLD 8,960,250 MARKETING AND ADMIN (FIXED) 1,500,000 TOTAL COSTS 10,460,250 3,414,750 1,126,868 OPERATING PROFIT TAXES 0.33 PROFIT AFTER TAXES 2,287,882 PREPARE A BUDGET FOR FEBRUARY TAKING INTO ACCOUNT THE FOLLOWING SALES VOLUME WILL INCREASE 30 PERCENT UNIT SALE VALUE WILL DECREASE 5 PERCENT COST OF GOODS SOLD WILL INCREASE LIKE SALES MARKETING AND ADMIN WILL DECREASE 6 PERCENT TAX RATE WILL INCREASE 3 PERCENTAGE POINTS

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter2: Basic Cost Management Concepts

Section: Chapter Questions

Problem 4CE: Refer to Cornerstone Exercises 2.2 and 2.3. Next year, Pietro expects to produce 50,000 units and...

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Refer to Cornerstone Exercises 2.2 and 2.3. Next year, Pietro expects to produce 50,000 units and sell 49,300 units at a price of 12.50 each. Beginning inventory of finished goods is 42,500, and ending inventory of finished goods is expected to be 34,000. Total selling expense is projected at 26,000, and total administrative expense is projected at 134,000. Required: 1. Prepare an income statement in good form. Be sure to include the percent of sales column. 2. What if the cost of goods sold percentage for the past few years was 65 percent? Explain how management might react.
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