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Please answer in entirety and show all work by hand. Thank you. 8) Dalley Inc. has the following information for its first year of operations:
Please answer in entirety and show all work by hand. Thank you.
8) Dalley Inc. has the following information for its first year of operations: YEAR 1 YEAR 2 Revenues (200,000 units) $2,900,000 Revenues Manufacturing costs: Manufacturing costs: Materials $168,000 Materials Variable cash costs 142,400 Variable cash costs Fixed cash costs 327,600 Fixed cash costs Depreciation (fixed) 999,000 Depreciation (fixed) Marketing & administrative costs: Marketing & administrative costs: Marketing (variable) 422,400 Marketing (variable) Marketing depreciation 149,600 Marketing depreciation Administrative (fixed) 509,200 Administrative (fixed) Administrative depreciation 74,800 Administrative depreciation Total costs $2,793,000 Total costs Operating profits S107.000 Operating profits All depreciation charges are fixed and are expected to remain the same for year 2. Sales volume is expected to increase by 15%, but sales prices are expected to fall by 4%. Material costs per unit are expected to decrease by 6%. Other unit variable manufacturing costs are expected to decrease by 2.5% per unit. Fixed manufacturing costs (other than depreciation) are expected to increase by 6% Variable marketing costs per unit will remain constant Administrative costs (other than depreciation) are expected to increase by 10% Assume there are no inventories. Dalley operates on a cash basis. Required: Prepare a budgeted income statement for year 2. (in above table)Step by Step Solution
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