Question

Pierceton Cycling has produced the following data for use in the budgeting process:
Budgeted sales (units)	$ 1,890
Sales price (per unit)	$                       745
Cost (per unit)	$                       240
Variable selling and administrative expense (per unit)	$                       105
Fixed selling and administrative expense (per year)	$             335,000
Interest expense	$                14,000
Prepare the budgeted income statement for the year
Budgeted Income Statement
Sales
Cost of goods sold
Gross Margin
Selling and administrative expenses
Net operating income
Interest expense
Net income
If the price of aluminum causes the cost per unit to increase by 5%, calculate the Net Income:

Answer 1

If Cost Per Unit increases by 5% $14,08,050 $4,76,280 $9,31,770 $5,33,450 $3,98,320 $14,000 $3,84,320 $14,08,050 $4,53,600 $9,54,450 $5,33,450 $4,21,000 $14,000 $4,07,000 Sales Cost of goods sold Gross Margin Selling and administrative expense Net operating income Interest expense Net income