Homework: Homework 11 Chapter 14 Due 12th of June 15.00 Question 3, Problem 14.3.12 HW Score: 48.97%, 48.97 of 100 points O Points: 0 of 34 Save Videocom 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 Videocom's financial performance. The following income statement shows results for this year. (Click the icon to view the income statement.) Videocom'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 euro.) Data table Revenues: Equipment + More info Videocom Company Budgeted Income Statement for next year (in thousands) Maintenance contracts Total revenues Cost of goods sold Gross margin Operating costs Marketing Distribution Customer maintenance Administration Total operating costs Onerating income 1. Selling prices of equipment are expected to increase by 15% 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 220,000, 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 160,000, 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. Videocom Company - Income Statement For the Year Ended December 31, this year (in thousands) Revenues: 9,500 1,400 10,900 4,200 6,700 Equipment Maintenance contracts Total revenues Cost of goods sold Gross margin Operating costs Marketing Distribution Customer maintenance Administration Total operating costs 620 140 1,600 990 3,350 3,350 Help me solve this Etext pages Get more help - Print Done Operating income Print Done