SmartVideo Company is a manufacturer of videoconferencing products. Maintaining the videoconferencing equipment is an important area of customer satisfaction. A recent downturn in the computer industry has caused the videoconferencing equipment segment to suffer, leading to a decline in SmartVideo's financial performance. The following income statement shows results for 2017: 2 (Click the loon to view the income statement.) SmartVideo's management team is preparing the 2018 budget and is studying the following information: i (Click the icon to view the information.) Data Table Read the requirements Budgeted Income Statement for 2018 (in thousands) SmartVideo Company Income Statement for the Year Ended December 31, 2017 (in thousands) Revenues: Revenues: Equipment S 9,000 Equipment Maintenance contracts 1,900 Maintenance contracts Total revenues $ 10,900 Total revenues 4.700 Cost of goods sold Cost of goods sold Gross margin 6,200 Gross margin Operating costs Operating costs Marketing 600 Marketing Distribution 130 Distribution Customer maintenance 1,800 Customer maintenance 970 Administration Administration 3,500 Total operating costs Total Operating costs $ 2,700 Operating income Enter any number in the edit fields and then click Check Answer. SmartVideo Company is a manufacturer of videoconferencing products. Maintaining the videoconferencing equipment is an important area of customer satisfaction. A recent downturn in the computer industry has caused the videoconferencing equipment segment to suffer, leading to a decline in SmartVideo's financial performance. The following income statement shows results for 2017: B (Click the icon to view the income statement.) SmartVideo's management team is preparing the 2018 budget and is studying the following information: (Click the icon to view the information.) Read the requirements. vusunu X i More Info Revenues: Equipment Maintenance contracts 1. Total revenues Cost of goods sold 2. Gross margin 3. Operating costs Selling prices of equipment are expected to increase by 10% as the economic recovery begins. The selling price of each maintenance contract is expected to remain unchanged from 2017. Equipment sales in units are expected to increase by 6%, with a corresponding 6% growth in units of maintenance contracts. Cost of each unit sold is expected to increase by 4% to pay for the necessary technology and quality improvements. Marketing costs are expected to increase by $220,000, but administration costs are expected to remain at 2017 levels. Distribution costs vary in proportion to the number of units of equipment sold. Two maintenance technicians are to be hired at a total cost of $120,000, which covers wages and related travel costs. The objective is to improve customer service and shorten response time. There is no beginning or ending inventory of equipment. Marketing 4. Distribution 5. Customer maintenance 6. Administration Total operating costs 7. Operating income
