It is budgeting time for Rod Co. The following assumptions were agreed upon for the next year after strategic planning, which covered a five-year horizon: 1. Sales are estimated to be at 70,000 units at its national selling price of P126. 2. Sales discounts are given to various customers at different rates, and the net to gross ratio is at 93%. 3. Markup on merchandise is at 45% of the invoice cost. Beginning inventory is P80,900 and is expected to be reduced by P15,000 at the end of the period. 4. Selling and administrative expenses are expected to be 15% of gross sales. 5. Depreciation is computed at P500,000. 6. Seventy- five percent (75%) of sales are on credit. Doubtful accounts expense is estimated to be 1.5% of credit sales. Required: What is the budgeted income statement for Rod Co.

It is budgeting time for Rod Co. The following assumptions were agreed upon for the next year after strategic planning, which covered a five-year horizon: 1. Sales are estimated to be at 70,000 units at its national selling price of P126. 2. Sales discounts are given to various customers at different rates, and the net to gross ratio is at 93%. 3. Markup on merchandise is at 45% of the invoice cost. Beginning inventory is P80,900 and is expected to be reduced by P15,000 at the end of the period. 4. Selling and administrative expenses are expected to be 15% of gross sales. 5. Depreciation is computed at P500,000. 6. Seventy- five percent (75%) of sales are on credit. Doubtful accounts expense is estimated to be 1.5% of credit sales. Required: What is the budgeted income statement for Rod Co.

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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Carmichael Corporation is in the process of preparing next years budget. The pro forma income statement for the current year is as follows: Required: 1. What is the break-even sales revenue (rounded to the nearest dollar) for Carmichael Corporation for the current year? 2. For the coming year, the management of Carmichael Corporation anticipates an 8 percent increase in variable costs and a 60,000 increase in fixed expenses. What is the break-even point in dollars for next year? (CMA adapted)
A companys sales for the coming months are as follows: About 20 percent of sales are cash sales, and the remainder are credit sales. The company finds that typically 10 percent of a months credit sales are paid in the month of sale, 70 percent are paid the next month, and 15 percent are paid in the second month after sale. Expected cash receipts in July are budgeted at what amount? a. 114,520 b. 143,150 c. 145,720 d. 156,000
Stan Corporation budgeted sales and gross profit rate for the coming month are P288M and 37.5 %, respectively. Short term interest rates are expected to average 6%. If Stan could increase the inventory turnover from its current 8.0 times to 10.0 times per year, its expected cost savings on the current year would be?
Mars Company is in the period of budgeting for next year. The Sales manager forecasted the number of units to be sold as 5000 units and determined the selling price at 10 OMR per unit. The management revised these estimates with a 10 % decrease in selling price and with a 20 % increase in the number of units sold. According to these revised estimates, which of the following is the revised Sales (OMR)? Select one: O a. OMR 44000 O b. OMR 54000 O c. OMR 66000 O d. OMR 50000
Jarziz Company is in the period of budgeting for 2022. The Sales manager forecasted the number of units to be sold as 25000 units and determined the selling price as 40 OMR per unit. The management revised these estimates with a 20 % increase in selling price and with a 25 % decrease in the number of units sold. According to these estimates, which of the following is revised Sales (OMR)? Select one: a. 1,150,000 b. 1,010,000 c. 900,000 d. 980,000
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Violet Sales Corp, reports the year-end information from 2023 as follows: Sales (35,500 units) $284,000 Cost of goods sold 105,000 Gross margin 179,000 Operating expenses 152,000 Operating income $27,000 Violet is developing the 2024 budget. In 2024 the company would like to increase selling prices by 3.5%, and as a result expects a decrease in sales volume of 14%. All other operating expenses are expected to remain constant. Assume that cost of goods sold is a variable cost and that operating expenses are a fixed cost. What is budgeted sales for 2024?
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