Mattingly Ltd. sells a single product for £150 per unit. Total sales were 6,000 units. The company is considering a 10 percent price reduction in order to stay competitive. It is estimated that such a reduction will increase sales volume by 10 percent. Assume a 40 percent tax rate. Costs are budgeted as follows:
Required:
Prepare a budgeted income statement for next year assuming that the company reduces prices as planned.

Question

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The Answer of Mattingly Ltd. sells a single product for £150 per unit. Total sales were 6,000 units. The company is considering a 10 percent price reduction in order to stay competitive. It is estimated that such a reduction will increase sales volume by 10 percent. Assume a 40 percent tax rate. Costs are budgeted as follows:
Required:
Prepare a budgeted income statement for next year assuming that the company reduces prices as planned.