Kerwin Motors is a chain of car dealerships. Sales in the fourth quarter of last year were $3,800,000. Suppose management projects that its current year's quarterly sales will increase by 4% in quarter 1, by another 2% in quarter 2, by another 6% in quarter 3, and by another 5 in quarter 4. Management expects cost of goods sold to be 40% of revenues every quarter, while operating expenses should be 30% of revenues during each of the first two quarters. 20% of revenues during the third quarter, and 35% during the fourth quarter. Prepare a budgeted income statement for each of the four quarters and for the entire year. Requirement Prepare the first portion of the budgeted income statement through gross profit, then complete the statement. (Round the amounts to the nearest whole dollar.) Kerwin Motors Sales Less: Cost of goods sold Gross profit Less: Operating expenses Net income Budgeted Income Statement For the Upcoming Year Quarter 1 Quarter 2 Quarter 3 Quarter 4 Year

Kerwin Motors is a chain of car dealerships. Sales in the fourth quarter of last year were $3,800,000. Suppose management projects that its current year's quarterly sales will increase by 4% in quarter 1, by another 2% in quarter 2, by another 6% in quarter 3, and by another 5 in quarter 4. Management expects cost of goods sold to be 40% of revenues every quarter, while operating expenses should be 30% of revenues during each of the first two quarters. 20% of revenues during the third quarter, and 35% during the fourth quarter. Prepare a budgeted income statement for each of the four quarters and for the entire year. Requirement Prepare the first portion of the budgeted income statement through gross profit, then complete the statement. (Round the amounts to the nearest whole dollar.) Kerwin Motors Sales Less: Cost of goods sold Gross profit Less: Operating expenses Net income Budgeted Income Statement For the Upcoming Year Quarter 1 Quarter 2 Quarter 3 Quarter 4 Year

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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