The following information is available for Fairmount Industries from year 1 operations:Sales revenue (58,000 units)Manufacturing costsMaterialsVariable cash costsFixed cash costsDepreciation (fixed)Marketing and administrative costsMarketing (variable, cash)Marketing depreciationAdministrative (fixed, cash)Administrative depreciationTotal costsOperating profits (losses)$ 1,685,000$ 253,000558,000340,000173,000184,00054,000175,00021,500$ 1,758,500$ (73,500)All depreciation charges are fixed. Old manufacturing equipment with an annual depreciation charge of $35,000 will befully depreciated by the end of year 1 and will not be replaced with new equipment because it is still operating tospecification. Sales volume is expected to decrease by 2 percent. Sales price is expected to increase by 8 percent. On aper-unit basis, expectations are that materials costs will decrease by 5 percent and variable manufacturing cash costs willincrease by 4 percent. Fixed cash manufacturing costs are expected to increase by 12 percent.Variable marketing costs will change with volume. Administrative cash costs are expected to decrease by 15 percent.Inventories are kept at zero. Fairmount Industries operates on a cash basis. No change is expected in marketing oradministrative depreciation.Required:Prepare a budgeted income statement for year 2.Note: Do not round intermediate calculations. Round your final answers to the nearest whole dollar amounts.Fairmount IndustriesBudgeted Income StatementSales revenueManufacturing costs:Depreciation (fixed)Variable cash costsMarketing depreciationFor Year 2MaterialsTotal manufacturing cocteс

Sales Budget:The sales budget forecasts the sales and expenses of the business, giving targets to…

Answered: Required: Prepare a budgeted income…

Business

Accounting

Required: Prepare a budgeted income statement for year 2.

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter12: Balanced Scorecard And Other Performance Measures

Section: Chapter Questions

Problem 6EA: During the current year, Sokowski Manufacturing earned income of $350,000 from total sales of...

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The following information is available for RCA Industries from year 1 operations: Sales revenue (65,000 units) Manufacturing costs Materials Variable cash costs Fixed cash costs Depreciation (fixed) Marketing and administrative costs Marketing (variable, cash) Marketing depreciation Administrative (fixed, cash) Administrative depreciation Total costs Operating profits (losses) $1,735,000 $ 260,000 565,000 347,000 180,000 191,000 61,000 182,000 25,000 $1,811,000 $ (76,000) All depreciation charges are fixed. Sales volume is expected to decrease by 2 percent. Sales price is expected to increase by 8 percent. On a per-unit basis, expectations are that materials costs will decrease by 5 percent and variable manufacturing cash costs will increase by 4 percent. Fixed cash manufacturing costs are expected to increase by 12 percent. Variable marketing costs will change with volume. Administrative cash costs are expected to decrease by 15 percent. Inventories are kept at zero. Fairmount…
Required information [The following information applies to the questions displayed below.] The following information is available for Fairmount Industries from year 1 operations: Sales revenue (55,000 units) Manufacturing costs Materials Variable cash costs Fixed cash costs Depreciation (fixed) Marketing and administrative costs Marketing (variable, cash) Marketing depreciation Administrative (fixed, cash) Administrative depreciation Total cost Operating profits (losses) $ 1,670,000 $ 250,000 555,000 337,000 170,000 181,000 51,000 172,000 20,000 $ 1,735,000 $ (66,000) All depreciation charges are fixed. Old manufacturing equipment with an annual depreciation charge of $32,000 will be fully depreciated by the end of year 1 and will not be replaced with new equipment because it is still operating to specification Sales volume is expected to decrease by 2 percent. Sales price is expected to increase by 8 percent. On a per-unit basis, expectations are that materials costs will decrease by…
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Zachary Transport Company divides its operations into four divisions. A recent income statement for its West Division follows. ZACHARY TRANSPORT COMPANY West Division Income Statement for Year 3 Revenue $ 690,000 (540,000) (69,000) (89,000) (59,000) (149,000) Salaries for drivers Fuel expenses Insurance Division-level facility-sustaining costs Companywide facility-sustaining costs Net loss $(216,000) Required a. By how much would companywide income increase or decrease if West Division is eliminated? Should West Division be eliminated? b. Assume that West Division is able to increase its revenue to $780,000 by raising its prices. Determine the amount of the increase or decrease that would occur in companywide net income if the segment were eliminated. Should West Division be eliminated if revenue were $780,000? c. What is the minimurn amount of revenue required to justify continuing the operation of West Division? Complete this question by entering your answers in the tabs below.…
The following data are taken from the records of Dove Company, a division of Oasis Corporation for the year ended December 31, 2021 Sales 120,000,000.00Less: Variable Cost and Expenses 8,000,000.00Contribution Margin 4,000,000.00Less:: Direct Fixed Cost and Expenses 1,000,000.00Segment Income 3,000,000.00 The company used an average assets of P8,000,000.00 in 2021. The cost of capital is 12% Calculate the following:1. Return on Sales2. Asset Turnover3. ROI4. Residual Income
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