Budgeted Financial Statements Dancer Components

Prepare Budgeted Financial Statements

The following information is available for year 1for Dancer Components:



Revenues (300,000units) $5,700,000

Manufacturing costs

Material $ 336,000

Variable cash costs 284,800

Fixed cash costs 655,200

Depreciation (fixed) 1,998,000

Marketing and administrative costs

Marketing (variable, cash) 844,800

Marketing depreciation 299,200

Administrative (fixed, cash) 1,018,400

Administrative depreciation 149,600



All depreciation charges are fixed and are expected to remain the same for year2. Sales volume is expected to increase by 18 percent, but prices are expected to fall by 5 percent. Material costs per unit are expected to decrease by 8 percent. Other unit variable manufacturing costs are expected to decrease by 2 percent per unit. Fixed manufacturing costs are expected to increase by 5 percent. 

Variable marketing costs will change with volume. Administrative cash costs are expected to increase by 10 percent. Inventories are kept at zero. Dancer operates on a cash basis.

Required

Prepare a budgeted income statement for year 2.