yele Fit Company is a manufacturer of commercial grade exercise bikes that are told lo hotels and health clubs. Maintaining the bikes is an important area of cuntomer satisfaction. ecause of increase ingutiry competition. Cycle Fifs financial performance has suiffered. However, the introduction of a new model and a predicied upturn in the economy arh leading yde Firs managers to predict ingroved performance in 2021 . The following income statement shows results for 2020. (Ciok the icon to view the income statement.) ycle Firs management teamis preparing the 2021 budget and is studying the following informatson: (Gick the iosn to view the information.) Data table Cycle Fit Company Income Statement for the Year Ended December 31, 2020 (in thousands) 1. Selling prices of bikes are expected to increase by 10% due to the introduction of the new model. The selling price of each maintenance contract is expected to remain unchanged from 2020. 2. Bike sales in units are expected to increase by 4%, with a corresponding 4% growth in units of maintenance contracts. 3. Cost of each unit sold is expected to increase by 3% to pay for the necessary technology and quality improvements for the new model. 4. Marketing costs are expected to increase by $250,000. 5. Distribution costs vary in proportion to the number of bikes sold. 6. One additional maintenance technician is to be hired at a total cost of $140,000, which covers wages and related travel costs. The objective is to improve customer service and shorten response time. 7. There are no anticipated changes to adminstration costs. 8. There is no beginning or ending inventory of equipment. Requirement 1. Prepare a budgeted income statement for the year ending December 31, 2021. (Round your answers to the nearest whole thousand.) Cycle Fit Company Budgeted Income Statement for 2021 (in thousands) Revenues: Equipment Maintenance contracts Total revenues Cost of goods sold Gross margin Operating costs Marketing Distribution Customer maintenance Administration Total operating coutu Operating income
