Sampson Merchandising Firm is developing its budgets for Year 2 The Year 1 income statement is as follows Sales (200,000 units) $500,000 Less Cost of goods sold 325,000 Gross profit $175,000 Operating expenses (includes $20,000 of depreciation) 120,000 Net income $ 55,000 Selling prices will increase by 10 percent, and sales volume in units will decrease by 6 percent The cost of goods sold as a percent of sales will decrease to 62 percent Other than depreciation, all operating costs are variable How how a budgeted income statement for Year 2 would look

Question: Sampson Merchandising Firm is developing its budgets for Year 2.The Year 1 income statement is as follows: Sales (200,000 units) $500,000 Less Cost of goods

Sampson Merchandising Firm is developing its budgets for Year 2.The Year 1 income statement is as follows:

Sales (200,000 units)	$500,000
Less Cost of goods sold	325,000
Gross profit	$175,000
Operating expenses (includes $20,000 of depreciation)	120,000
Net income	$ 55,000

Selling prices will increase by 10 percent, and sales volume in units will decrease by 6 percent. The cost of goods sold as a percent of sales will decrease to 62 percent.Other than depreciation, all operating costs are variable.

How how a budgeted income statement for Year 2 would look

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