Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Rerun Manufacturing Company is in the process of preparing its 2016 budget and is anticipating the following changes: 25% increase in the number of units

Rerun Manufacturing Company is in the process of preparing its 2016 budget and is anticipating the following changes: 25% increase in the number of units sold. 15% increase in the direct material unit cost. 10% increase in the direct labor cost per unit. 8% increase in the manufacturing overhead cost per unit. 12% increase in the marketing price. 4% increase in the administrative expenses. Rerun does not keep any units in inventory. The composition of the cost of finished products during 2015 for materials, direct labor, and factory overhead, respectively, was in the ratio of 3:2:1. The condensed income statement for 2015 is as follows:

Sales (33,000 units) $495,000

Less sales returns 19,800

Net sales 475,200

Cost of Goods Sold 309,000

Gross Profit $166,200

Selling Expenses $63,000

Admin.Expenses 33,000 96,000

Net Income $70,200

What are estimated net sales for 2016, assuming the sales return/gross sales relationship remains constant?

$665,280.

$478,500.

$649,350.

$591,938.

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Making Auditors Effective Theory Evidence Perspectives

Authors: Mark Schelker

1st Edition

3832934375, 978-3832934378

More Books

Students also viewed these Accounting questions

Question

What are the major advantages and disadvantages of diversification?

Answered: 1 week ago

Question

to encourage a drive for change by developing new ideas;

Answered: 1 week ago

Question

4 What are the alternatives to the competences approach?

Answered: 1 week ago