Prepare Budgeted Financial Statements

(LO 13-6)

Cycle-1 is a fast-growing start-up firm that manufactures bicycles. The following income statement is available for October:

Sales revenue (300 units @ $600 per unit)	$180,000
Less
Manufacturing costs
Variable costs	26,000
Depreciation (fixed)	27,540
Marketing and administrative costs
Fixed costs (cash)	67,500
Depreciation (fixed)	22,860
Total costs	$143,900
Operating profits	$36,100

Sales volume is expected to increase by 20 percent in November, but the sales price is expected to fall 10 percent. Variable manufacturing costs are expected to increase by 4 percent per unit in November. In addition to these cost changes, variable manufacturing costs also will change with sales volume. Marketing and administrative cash costs are expected to increase by 8 percent.

Cycle-1 operates on a cash basis and maintains no inventories. Depreciation is fixed and should remain unchanged over the next three years.

Required

Prepare a budgeted income statement for November.

Can you provide step by step eqautions