Refer to the data in Exercise 13-28. Varmit-B-Gone estimates that the number of subscribers in September should
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Service costs
Variable costs . . . . . . . . . . . . . . . . . . . . . . . . $ 24,000
Maintenance and repair. . . . . . . . . . . . . . . . . . 22,000
Depreciation (fixed) . . . . . . . . . . . . . . . . . . . . 42,000
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 88,000
Marketing and administrative costs
Marketing (variable) . . . . . . . . . . . . . . . . . . . $ 14,500
Administrative (fixed) . . . . . . . . . . . . . . . . . . 55,000
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 69,500
Total costs . . . . . . . . . . . . . . . . . . . . . . . . . . .$157,500
Variable service and marketing costs change with volume. Fixed depreciation will remain the same, but fixed administrative costs will increase by 5 percent beginning September 1. Maintenance and repair are provided by contract, which calls for a 1 percent increase in September.
Required
Prepare a budgeted income statement for September.
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Related Book For
Fundamentals of Cost Accounting
ISBN: 978-0077398194
3rd Edition
Authors: William Lanen, Shannon Anderson, Michael Maher
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