Coyle Manufacturing reports the following information for year 1: Sales revenue (69,000 units) $ 5,265,000 Manufacturing costs Materials $ 311,000 Variable cash costs 256,000 Fixed cash costs 599,000 Depreciation (fixed) 1,809,000 Marketing and administrative costs Marketing (variable, cash) 850,000 Marketing depreciation 278,000 Administrative (fixed, cash) 925,000 Administrative depreciation 143,000 Total costs $ 5,171,000 Operating profits (losses) $ 94,000 All depreciation charges are fixed. Manufacturing depreciation is expected to increase by 10 percent in year 2. Marketing and administrative depreciation are expected to remain the same for year 2. Sales volume is expected to increase by 5 percent, but prices are expected to fall by 10 percent. Materials costs per unit are expected to decrease by 8 percent. Unit variable cash manufacturing costs are expected to increase by 15 percent. Fixed cash costs are expected to increase by 6 percent. Variable marketing costs will change with unit volume. Administrative cash costs are expected to decrease by 10 percent. Inventories are kept at zero. Coyle Manufacturing operates on a cash basis. Required: Prepare a budgeted income statement for year 2 for Coyle Manufacturing. Note: Do not round intermediate calculations. Round your final answers to the nearest who

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter2: Basic Cost Management Concepts

Section: Chapter Questions

Problem 22E: Ellerson Company provided the following information for the last calendar year: During the year,...

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Coyle Manufacturing reports the following information for year 1:

Sales revenue (69,000 units)	$ 5,265,000
Manufacturing costs
Materials	$ 311,000
Variable cash costs	256,000
Fixed cash costs	599,000
Depreciation (fixed)	1,809,000
Marketing and administrative costs
Marketing (variable, cash)	850,000
Marketing depreciation	278,000
Administrative (fixed, cash)	925,000
Administrative depreciation	143,000
Total costs	$ 5,171,000
Operating profits (losses)	$ 94,000

All depreciation charges are fixed. Manufacturing depreciation is expected to increase by 10 percent in year 2. Marketing and administrative depreciation are expected to remain the same for year 2. Sales volume is expected to increase by 5 percent, but prices are expected to fall by 10 percent. Materials costs per unit are expected to decrease by 8 percent. Unit variable cash manufacturing costs are expected to increase by 15 percent. Fixed cash costs are expected to increase by 6 percent.

Variable marketing costs will change with unit volume. Administrative cash costs are expected to decrease by 10 percent. Inventories are kept at zero. Coyle Manufacturing operates on a cash basis.

Required:

Prepare a budgeted income statement for year 2 for Coyle Manufacturing.

Note: Do not round intermediate calculations. Round your final answers to the nearest who

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