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Sports Bars, Inc., produces energy bars. Management estimates all selling and administrative costs are fixed. Quarterly selling and administrative cost estimates for the coming year
Sports Bars, Inc., produces energy bars. Management estimates all selling and administrative costs are fixed. Quarterly selling and administrative cost estimates for the coming year follow:
Costs | Value |
---|---|
Salaries | $170,000 |
Rent | $65,000 |
Advertising | $120,000 |
Depreciation | $75,000 |
Other | $36,000 |
Sales budget for the year:
Quarter 1 | Quarter 2 | Quarter 3 | Quarter 4 | Year | |
---|---|---|---|---|---|
Projected sales in units | 80,000 | 84,000 | 88,000 | 97,000 | 349,000 |
Sales price per unit | $25 | $25 | $25 | $25 | $25 |
Sales revenue* | $2,000,000 | $2,100,000 | $2,200,000 | $2,425,000 | $8,725,000 |
* Sales revenue equals projected sales in units x sales price per unit
Required:
- Use the information presented above to prepare a selling and administrative budget. Refer to the format shown in Table 9.4.
- Use the information from the sales table above to prepare a budgeted income statement. Refer to the format shown in Table 9.5.
- How will management use the information presented in the budgeted income statement?
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