Cumberland Inc has the following information for its first year of operations:
All depreciation charges are fixed and are expected to remain the same for year 2.Sales volume is expected to increase by 15%,but selling prices are expected to fall by 4%.Material costs per unit are expected to decrease by 6%.Other unit variable manufacturing costs are expected to decrease by 2.5% per unit.Fixed manufacturing costs (other than depreciation)are expected to increase by 6%.
Variable marketing costs per unit will remain constant.Administrative costs (other than depreciation)are expected to increase by 10%.
Assume there are no inventories.Cumberland operates on a cash basis.
Required: Prepare a budgeted income statement for year 2.

Question

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The Answer of Cumberland Inc has the following information for its first year of operations:
All depreciation charges are fixed and are expected to remain the same for year 2.Sales volume is expected to increase by 15%,but selling prices are expected to fall by 4%.Material costs per unit are expected to decrease by 6%.Other unit variable manufacturing costs are expected to decrease by 2.5% per unit.Fixed manufacturing costs (other than depreciation)are expected to increase by 6%.
Variable marketing costs per unit will remain constant.Administrative costs (other than depreciation)are expected to increase by 10%.
Assume there are no inventories.Cumberland operates on a cash basis.
Required: Prepare a budgeted income statement for year 2.

Cumberland Inc Has the Following Information for Its First Year