Janniel Inc. is preparing its budget for 2016. Income statement for 2015 is presented below: Sales (100,000 units) P1,000,00 Cost of sales 600,000 Gross Profit P400,000 Operating expenses 240,000 Operating Income P160,000 Operating expenses includes depreciation of P40,000. For the year 2016, the company plans to increase selling price by 10% which is expected to decrease sales volume in units by 5%. The cost of sales as a percent of sales will increase to 62%. Other than depreciation, all operating costs are variable. Required: What is the budgeted income for 2016?
Janniel Inc. is preparing its budget for 2016. Income statement for 2015 is presented below: Sales (100,000 units) P1,000,00 Cost of sales 600,000 Gross Profit P400,000 Operating expenses 240,000 Operating Income P160,000 Operating expenses includes depreciation of P40,000. For the year 2016, the company plans to increase selling price by 10% which is expected to decrease sales volume in units by 5%. The cost of sales as a percent of sales will increase to 62%. Other than depreciation, all operating costs are variable. Required: What is the budgeted income for 2016?
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 18E: Carmichael Corporation is in the process of preparing next years budget. The pro forma income...
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