Question
XYZ Company sells one product. Sales for 2018 are forecasted to be 200,000 units. The product is priced at $55 per unit. The product contains
XYZ Company sells one product. Sales for 2018 are forecasted to be 200,000 units. The product is priced at $55 per unit. The product contains $11.50 of materials per unit and costs $8.25 per unit to assemble. Annual promotion costs are budgeted at $550,000. There are three salespeople each earning a base salary of $50,000 per year plus 20% commission. The product is shipped in cases of 12 at a cost of $24 per case to deliver. Overhead expenses total $155,000. Create a pro forma income statement for the upcoming year, and address the following questions.
- What is the expected revenue (total sales in dollars) for 2018?
- What is the expected total cost of goods sold for 2018?
- What is the expected total marketing expense for 2018?
- Marketing expenses represent what percentage of sales?
- What is the projected net income for 2018?
Please do not copy from Chegg otherwise I have to report the answer. Explain the answer throughly by showing each step of the calculation.
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