Budgeted Income Statement for Julian Enterprises
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Julian Enterprises reports the year-end information from 2010 as follows:
Sales (100,000 units) - $250,000
Less: cost of goods sold - $150,000
Gross profit - $100,000
Operating expenses (includes $10,000 of depreciation) - $60,000
Net income - $ 40,000
Julian is developing the 2011 budget. In 2011 the company would like to increase selling prices by 10%, and as a result expects a decrease in sales volume of 5%. Cost of goods sold as a percentage of sales is expected to increase to 62%. Other than depreciation, all operating costs are variable.
Prepare a budgeted income statement for 2011.
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This solution illustrates how to prepare a budgeted income statement.
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