The following details have been taken from the books of ABC Company Limited for the year ended 30th June 2022.

	TZS	TZS
Sale		136,000,000
Direct materials	40,000,000
Direct wages	28,000,000
Direct expenses	2,000,000
Factory overheads	14,000,000
Administration overheads	16,800,000
Selling overheads	12,600,000	113,400,000
Profit		22,680,000

59% of factory overhead and 60% of selling overheads are analyses as variable. The forecast for the next year ending 30th June 2003 is as follows:-

Sales volume will increase by 30% but the selling price will be reduced by 5%

The prices of raw materials will remain unchanged but because of increased purchases, a quantity discount of 5% will be obtained.

Variable overheads (selling and factory), direct wages and expenses will increase in proportion of sales volume

Wages and Factory Overheads (variable only) will go up by a further 10% due to an increase in rates.

Administration overheads will decrease by 2%

These will be no stock of work in progress and finished goods in the beginning or end of the year.

Required

Prepare a budgeted income statement of ABC Company for the next year ending 30th June 2023.

Answer rating: 100% (QA)

ABC Company Limited Budgeted Income Statement For the Year Ending 30th June 2023 TZS Sales 136000000 ... View the full answer