Cymbal E-Motors is a fast-growing start-up firm that manufactures electric motors for bicycles. The following income...
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Cymbal E-Motors is a fast-growing start-up firm that manufactures electric motors for bicycles. The following income statement is available for April: Sales revenue (790 units @ $1,100 per unit) Less Manufacturing costs Variable costs Depreciation (fixed) Marketing and administrative costs Fixed costs (cash) Depreciation (fixed) Total costs Operating profits $ 869,000 60,400 53,000 124,000 61,000 $ 298,400 $ 570,600 Sales volume is expected to increase by 30 percent in May, but the sales price is expected to fall 5 percent. Variable manufacturing costs are expected to increase by 7.5 percent per unit in May. In addition to these cost changes, variable manufacturing costs also will change with sales volume. Marketing and administrative cash costs are expected to increase by 15 percent. All revenues and costs at Cymbal are cash transactions, except for depreciation. Cymbal maintains no inventories. Depreciation is fixed and is forecast to remain unchanged in the next six months. Required: Prepare a budgeted income statement for May. Cymbal E-Motors is a fast-growing start-up firm that manufactures electric motors for bicycles. The following income statement is available for April: Sales revenue (790 units @ $1,100 per unit) Less Manufacturing costs Variable costs Depreciation (fixed) Marketing and administrative costs Fixed costs (cash) Depreciation (fixed) Total costs Operating profits $ 869,000 60,400 53,000 124,000 61,000 $ 298,400 $ 570,600 Sales volume is expected to increase by 30 percent in May, but the sales price is expected to fall 5 percent. Variable manufacturing costs are expected to increase by 7.5 percent per unit in May. In addition to these cost changes, variable manufacturing costs also will change with sales volume. Marketing and administrative cash costs are expected to increase by 15 percent. All revenues and costs at Cymbal are cash transactions, except for depreciation. Cymbal maintains no inventories. Depreciation is fixed and is forecast to remain unchanged in the next six months. Required: Prepare a budgeted income statement for May.
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Answer rating: 100% (QA)
To prepare a budgeted income statement for May we need to adjust the April income statement figures based on the given changes in sales volume sales p... View the full answer
Related Book For
Managerial accounting
ISBN: 978-0471467854
1st edition
Authors: ramji balakrishnan, k. s i varamakrishnan, Geoffrey b. sprin
Posted Date:
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