Best Video Company is a manufacturer of video-conferencing products. Regular units are manufactured to meet marketing projections, and specialised units are made after an order is received. Maintaining the video-conferencing equipment is an important area of customer satisfaction. With the recent downturn in the computer industry, the video conferencing equipment segment has suffered, leading to a decline in Best Video's financial performance. The following income statement shows results for this year. (Click the icon to view the income statement.) Data Table Best Video's management team is in the process of preparing the budget for next year and is studying the following information: (Click the icon to view the information.) Prepare a budgeted income statement for the year ending December 31, next year. (Round your answers to the nearest whole ey income statement For the Year Ended December 31, this year (in thousands) Best Video Company Revenues: Equipment 7.500 Budgeted Income Statement for next year 1,300 (in thousands) Maintenance contracts Total revenues Revenues: 8,800 4,100 Equipment Cost of goods sold Maintenance contracts Gross margin 4.700 Total revenues Operating costs Marketing 640 Cost of goods sold Distribution 150 Gross margin Operating costs Customer maintenance 1,100 980 Marketing Administration 2,870 Total operating costs Enter any number in the edit fields, then click Check Answer. 1,830 Operating income All parts showing Clear All als Best Video Company is a manufacturer of video-conferencing products. Regular units are manufactured to meet marketing projections, and specialised units are made after an order is received. Maintaining the video-conferencing equipment is an important area of customer satisfaction. With the recent downturn in the computer industry, the video-conferencing equipment segment has suffered, leading to a decline in Best Video's financial performance. The following income statement shows results for this year. (Click the icon to view the income statement.) i More Info Best Video's management team is in the process of preparing the budget for next year and is studying the following information: (Click the icon to view the information.) X Prepare a budgeted income statement for the year ending December 31, next year. (Round your answers to the nearest whole Maintenance contracts Total revenues Cost of goods sold Gross margin Operating costs 1. Selling prices of equipment are expected to increase by 10% as the economic recovery begins. The selling price of each maintenance contract is expected to remain unchanged from this year. 2. Equipment sales in units are expected to increase by 4%, with a corresponding 4% growth in units of maintenance contracts. 3. Cost of each unit sold is expected to increase by 3% to pay for the necessary technology and quality improvements. 4. Marketing costs are expected to increase by 260,000, but administration costs are expected to remain at this year levels. 5. Distribution costs vary in proportion to the number of units of equipment sold. 6. Two maintenance technicians are to be hired at a total cost of 120,000, which covers wages and related travel costs. The objective is to improve customer service and shorten response time. 7. There is no beginning or ending inventory of equipment. Marketing Distribution Customer maintenance Administration Total operating costs Operating income (11) Print Done Enter any number in the edit fields, then click Check
