All depreciation charges are fixed and are expected to remain the same for year 2. Sales volume
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Question:
All depreciation charges are fixed and are expected to remain the same for year 2. Sales volume is expected to fall by 7 percent, but prices are expected to rise by 18 percent. Material costs per unit are expected to increase by 10 percent. Other unit variable manufacturing costs are expected to decrease by 5 percent per unit. Fixed cash costs are expected to increase by 6 percent.
Variable marketing costs will change with unit volume. Administrative cash costs are expected to increase by 3 percent. Inventories are kept at zero. Pepper Products operates on a cash basis.
Required:
Prepare a budgeted income statement for year 2.
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