Question
Kramer Enterprises reports year-end information from 2015 as follows: Sales (160,000 units) $960,000 Cost of goods sold 600,000 Gross margin 360,000 Operating expenses 260,000 Operating
Kramer Enterprises reports year-end information from 2015 as follows: Sales (160,000 units) $960,000 Cost of goods sold 600,000 Gross margin 360,000 Operating expenses 260,000 Operating income 100,000 Kramer is developing the 2016 budget. In 2016 the company would like to increase selling prices by 15%, and as a result expects a decrease in sales volume of 10%. All other operating expenses are expected to remain constant. Assume that cost of goods sold is a variable cost and that operating expenses are a fixed cost.
a) What is budgeted sales for 2016? b) What is budgeted cost of goods sold for 2016?
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